Results: Tata Steel Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

As you might know, Tata Steel Limited (NSE:TATASTEEL) just kicked off its latest second-quarter results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 4.3% to hit ₹587b. Tata Steel reported statutory earnings per share (EPS) ₹2.49, which was a notable 16% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the most recent consensus for Tata Steel from 30 analysts is for revenues of ₹2.33t in 2026. If met, it would imply a satisfactory 5.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 82% to ₹9.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹2.34t and earnings per share (EPS) of ₹10.12 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Check out our latest analysis for Tata Steel

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹185, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Tata Steel, with the most bullish analyst valuing it at ₹215 and the most bearish at ₹145 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Tata Steel's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 5.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Tata Steel is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Tata Steel. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Tata Steel going out to 2028, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Tata Steel (of which 1 makes us a bit uncomfortable!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.