Tata Steel shares gain as company unveils multiple capex plans, is JPMorgan's preferred bet

Shares of Tata Steel Ltd. were trading up nearly 2% on Thursday, December 11, after the company unveiled a series of major capex plans.

The steelmaker outlined a broad expansion roadmap. It will first scale up capacity at NINL by 4.8 mtpa in Phase 1, followed by the establishment of a 2.5 mtpa thin slab caster and rolling mill in Odisha. Tata Steel will also set up a 0.7 mtpa hot rolled pickling and galvanising line in Maharashtra to strengthen its downstream presence.

The two companies, Tata Steel and Lloyd Metal, have signed an MoU to collaborate across iron ore mining, logistics including slurry pipelines, and pellet and steelmaking in Maharashtra.

Tata Steel also plans to build a greenfield steel plant of 6 mtpa in the state, in two phases. In a parallel step, it has acquired a 50.01% stake in Thriveni Pellets in Odisha for ₹636 crore.

In Jamshedpur, the company will begin work on a 1 mtpa facility based on HIsarna technology, a process aimed at lowering carbon emissions in steelmaking.

Analysts view these developments as a clear positive, saying the fresh capex cycle directly addresses concerns around Tata Steel's growth visibility and market share in India.

The partnership with Lloyd Metal, in particular, gives Tata Steel a foothold in western India, one of the fastest growing steel markets, while also improving long term iron ore security.

Within JPMorgan's coverage universe, Tata Steel remains its top pick, while the brokerage stays underweight on NMDC.

It expects domestic steel prices to remain range-bound as production continues to outpace consumption, PSU coking coal imports surge and uncertainty persists around safeguard duties.

Although prices seem to have bottomed, now trading at a 3 to 4% discount to the landed cost of imports, the key triggers to watch will be steel demand in the seasonally strong fourth quarter and the government's safeguard duty decision.

JPMorgan's preference for Tata Steel is backed by a 12% improvement in Europe's spot steel spreads versus Q2 to $315 per ton, which helps offset weakness in India, with the brokerage expecting a sharper rebound in EU steel prices in 2026.

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