Synopsis

Tata Steel shares are nearing record highs, up 12% in April, as Nomura maintains a bullish outlook on India's resilient steel sector. The brokerage believes global headwinds, including Chinese competition and Middle East conflict impacts, will have limited effect on major players' earnings potential.

Shares of Tata Steel have gained around 12% so far in April, nearing their record high, with international brokerage Nomura remaining bullish on India’s steel sector, which it says is resilient to multiple headwinds.

In a note released on Monday, Nomura said it maintains a positive outlook on the sector, adding that global factors, including the impact of Chinese competition, are likely to have a limited effect on the earnings potential of major steel players. “Our bullish stance on the Indian steel sector is underpinned by improving domestic price momentum despite global headwinds,” it said.

The war between the US and Iran, and the subsequent closure of the Strait of Hormuz, triggered an energy crisis that rattled global markets in March. Nomura believes large, blast furnace-based steel players are relatively better positioned than smaller, gas-based DRI producers, as they can partially substitute LPG usage with alternatives in downstream operations.

In the absence of any significant disruption or sustained cost escalation so far, the brokerage has maintained its earnings estimates for stocks under its coverage. It has reiterated its ‘Buy’ ratings on Tata Steel, JSW Steel, Jindal Steel, and Lloyds Metals.

Should you buy Tata Steel shares?

Nomura has set a target price of Rs 220 apiece for Tata Steel shares, implying an upside potential of nearly 4% from the stock's last closing price of Rs 211.72 apiece.

The global brokerage noted that Indian steel prices slightly corrected last week, but remain near elevated levels. “China’s steel sector witnessed a notable slowdown with steel production in March 2026 declining by 6.3% y-y to 87.04MT, marking the lowest level for the month since mid-2020. The weakness extended to trade flows as steel exports fell by 12.6% y-y to 9.13MT, partly impacted by disruptions from the Middle East conflict,” it said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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