Steel stocks fall: Tata Steel, SAIL, JSW on Q4 FY26

Monday trade: steel shares in the red

Shares of Tata Steel Ltd, Steel Authority of India Ltd (SAIL) and JSW Steel Ltd traded lower on Monday, May 18, with investors reacting to fourth-quarter numbers and fresh brokerage notes. At last check, Tata Steel was down 4.11% at ₹207.90. SAIL fell 0.65% to ₹191.10, while JSW Steel slipped 0.35% to around ₹1,274.

The intraday damage was sharper at the lows. Tata Steel dropped 5.4% to ₹205.05. SAIL touched ₹188.21, down 2% on the day, while JSW Steel fell 1.6% to ₹1,258.30 on the NSE.

One-month performance shows mixed momentum

Despite the weak session, the one-month trend was not uniform across the three names. SAIL and JSW Steel were up 9.3% and 2.2%, respectively, over the past month. Tata Steel, however, was down 1.6% over the same period.

This divergence mattered because the same set of sector drivers was being cited for all three companies, including domestic demand expectations and a recovery in realised steel prices after policy support.

Tata Steel Q4 FY26: EBITDA up QoQ, Europe mixed

Nuvama said Tata Steel posted an in-line Q4 FY26 adjusted EBITDA (standalone) of ₹9,430 crore versus its estimate of ₹9,350 crore, up 19% quarter-on-quarter. EBITDA per tonne was ₹15,245, up ₹2,155 per tonne QoQ, which it attributed to higher steel prices.

For the European businesses, the brokerage noted that Netherlands profitability was down, while UK losses declined. On a consolidated basis, adjusted EBITDA rose 20% QoQ to ₹9,950 crore.

Separately, Tata Steel reported a 125% year-on-year rise in consolidated net profit to ₹2,926 crore for the quarter ended March 31, 2026 (Q4 FY26), compared with ₹1,301 crore a year earlier.

Nuvama on Tata Steel: HOLD, TP raised to ₹209

Nuvama said it expects Q1 FY27 EBITDA per tonne to increase by about ₹2,600 per tonne QoQ, citing higher prices, though offset by higher raw material costs and lower volume.

It raised FY27E and FY28E EBITDA estimates by 9% and 6% to reflect higher steel prices. The target price was revised to ₹209 from ₹189, based on 7x India and 5x Europe FY28E EV/EBITDA, with a ‘HOLD’ rating. Nuvama also noted the stock traded at 6.8x FY28E EV/EBITDA.

SAIL Q4 FY26: sharp QoQ jump in operating profit

For SAIL, Nuvama flagged a better-than-expected Q4 FY26. It estimated adjusted EBITDA at about ₹4,400 crore versus its estimate of ₹3,920 crore, up 92% QoQ. Adjusted EBITDA per tonne was ₹8,282, up ₹3,817 per tonne QoQ, versus its estimate of ₹7,085 per tonne.

The numbers were cited as evidence of operating leverage as realisations improved, although the stock still sold off during Monday’s session.

Nuvama on SAIL: REDUCE despite TP upgrade

Nuvama raised SAIL’s target price to ₹139 from ₹111, valuing it at 6.5x FY28E EV/EBITDA, while maintaining a ‘REDUCE’ rating. It also said the stock traded at 8.3x FY28E EV/EBITDA.

In the same news flow, Morgan Stanley was also cited as downgrading SAIL from Equal Weight to Underweight, with a target price of ₹140.

JSW Steel Q4 FY26: higher prices and volumes lift EBITDA

Nuvama said JSW Steel reported better-than-expected consolidated adjusted EBITDA of ₹9,250 crore versus its estimate of ₹8,430 crore, up about 40% QoQ. The brokerage attributed the improvement to higher steel prices and volume growth, partly offset by higher raw material costs.

It added that Indian operations’ adjusted EBITDA was ₹9,110 crore, up about 40% QoQ. Adjusted EBITDA per tonne rose to ₹11,622, up ₹2,837 QoQ.

Nuvama on JSW Steel: REDUCE, TP raised to ₹1,129

Nuvama raised FY27E and FY28E EPS estimates by about 12% and 18% on higher margins. Even so, it retained a ‘REDUCE’ rating and raised the target price to ₹1,129 from ₹1,057, valuing the stock at 9.5x FY28E EV/EBITDA. It said the stock traded at 10.6x FY28E EV/EBITDA.

Policy backdrop: safeguard duty and cost pressures

Brokerage commentary in the same coverage linked sector profitability to the recovery in domestic steel prices after the government imposed a 12% safeguard duty in mid-December 2025. ICICI Securities said domestic steel prices recovered by more than ₹5,000 per tonne after the duty, supporting profitability. It also flagged that the recent rise in coking coal prices, up about ₹1,500 per tonne QoQ, could cap gains to some extent.

Demand indicators were also highlighted. The article cited that steel consumption during 9-month FY25-26 grew by almost 7% over the same period last year.

Tuesday rebound: steel names among top gainers

The coverage also noted that steel manufacturers rose 2% to 6% on Tuesday on expectations of strong domestic demand, with names such as SAIL, Tata Steel, Jindal Steel and JSW Steel among the gainers.

Another data point mentioned was that thermal coal prices in Q4 FY26 rose 12% quarter-on-quarter compared with the Q3 FY26 average, which would increase input costs for sponge iron producers.

What brokerages are recommending across the pack

There was a wide spread in targets and ratings across brokerages mentioned. Axis Securities reiterated a ‘Buy’ on Tata Steel with a target price of ₹219 per share, noting higher steel prices in India could offset higher coking coal consumption costs and that capex sequencing would remain aligned to balance sheet strength.

ICICI Securities had a ‘BUY’ on SAIL with a target price of ₹200, valuing it at 7x FY28E EV/EBITDA and noting it traded at 6x FY28E EV/EBITDA among peers in its note. For JSW Steel, the article cited a ‘buy’ with a target price of ₹1,400 and an expectation that EBITDA per tonne could rebound to ₹13,500 in FY27/28E on domestic price recovery led by the safeguard duty.

Centrum Broking’s list included ‘buy’ ratings on JSW Steel (target ₹1,294) and Tata Steel (target ₹218), while it had a ‘neutral’ view on SAIL (target ₹140).

Key numbers at a glance

Target prices and ratings referenced in the coverage

Market impact: why results did not prevent a sell-off

The Monday decline showed that strong quarter-on-quarter operating numbers did not automatically translate into positive price action. The same brokerage note that highlighted higher steel prices also pointed to offsets such as higher raw material costs and, for Tata Steel, mixed performance in European operations.

At the same time, the sector remained sensitive to policy-led price moves. The safeguard duty and stricter import norms were cited as drivers that helped steel prices recover toward ₹49,000 per tonne by December 2025. Input costs, including coking coal and thermal coal trends mentioned in the coverage, remained a counterweight in the narrative.

Conclusion

Steel shares saw a sharp down move on May 18 even as brokerages pointed to stronger quarter-on-quarter profitability and supportive domestic pricing after the mid-December 2025 safeguard duty. Investors will likely track how higher steel prices, raw material costs and volumes translate into EBITDA per tonne in the next few quarters, alongside updates on Europe-related performance for Tata Steel.