Tata Steel Falls Into Oversold Territory Despite Positive Brokerage Targets

Tata Steel shares have slipped into oversold territory even as brokerages remain broadly bullish. The stock fell 1.26% to ₹187.75, against a previous close of ₹190.15. Tata Steel’s RSI now stands at 29.1, signaling oversold conditions on the charts. Shares have dropped 6% in a week and 10% over the past month. Despite this correction, several brokerages maintain price targets well above current levels for Tata Steel.

What’s Driving Tata Steel’s Recent Correction

Tata Steel (TATASTEEL.NS) has slumped 4.14% over the past three months amid global steel headwinds. Plunging global steel prices, driven by Chinese overcapacity, have pressured the sector broadly. Rising coking coal costs have further compressed margins across Tata Steel’s operations. 

Ongoing restructuring in its European business continues weighing on overall profitability. The stock now trades below its 5, 10, 20, 30, 50, 100, 150, and 200-day moving averages.

• Tata Steel’s 52-week range spans ₹152.51 to ₹224.4.
• The stock sits 16.60% below its 52-week high currently.
• Market capitalization stands near ₹2,38,672 crore as of mid-July.

Q4 FY26 Results Fell Short of Estimates

Tata Steel’s Q4 FY26 results, announced May 18, 2026, missed some analyst expectations. Net profit still surged 125% year-over-year to ₹2,926 crore for the quarter. Revenue from operations rose 13% to ₹63,270 crore, compared to ₹56,218 crore last year. Restructuring and cost-saving measures at the Netherlands operations boosted quarterly earnings significantly. Tata Steel declared a dividend of ₹4 per share, with July 6, 2026 as the record date.

Brokerage Targets Remain Bullish on Tata Steel

Despite near-term weakness, most brokerages retain constructive views on Tata Steel’s outlook. Nomura has set a price target of ₹240, citing resilience and cost advantages. Motilal Oswal maintains a “Buy” rating with an SOTP-based target of ₹250. YES Securities has an “Add” rating with a ₹240 target price currently. Axis Securities raised its target to ₹235 from ₹220, keeping a “Hold” rating.

• Nomura projects significant margin expansion across India’s broader steel sector.
• Motilal Oswal values Tata Steel at 7.1x EV/EBITDA on FY28 estimates.
• Bloomberg consensus shows 51% buy ratings among covering analysts currently.

Volume Growth Supports the Long-Term Case

Axis Securities expects Tata Steel’s volumes to rise by 2 million tonnes in FY27. This growth will come from a full year of KPO-II production capacity. An additional 0.5 million tonnes should arrive from the new Ludhiana EAF facility. These expansions support brokerages’ confidence in Tata Steel’s medium-term earnings trajectory. Average analyst return potential for the stock currently sits near 11.6%.

Technical Picture and Sector Comparison

Tata Steel’s selling pressure may be nearing exhaustion near current levels. Support has formed in the ₹185 to ₹190 zone. The Sensex has recovered even as Tata Steel corrected separately, pointing to sector-specific pressure. Peers like JSW Steel and SAIL face similar coking coal cost pressures. 

• Tata Steel has still gained 15% year-to-date despite the recent pullback.
• The stock has returned 101% over the past three years cumulatively.
• Six-month returns stand at 26.27%, reflecting strong earlier momentum.

Conclusion

Tata Steel’s oversold reading reflects short-term pressure from global steel prices and rising input costs. Brokerages, however, continue backing the stock’s longer-term structural growth story. Price targets from Nomura, Motilal Oswal, and YES Securities all sit well above current trading levels. Volume expansion from KPO-II and the Ludhiana EAF facility should support future earnings growth. Investors should watch whether the ₹185-190 support zone holds in coming sessions. For now, Tata Steel’s correction appears technical rather than a shift in its fundamental outlook.

Disclaimer:

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