Tata Steel (TATASTEEL)

FairStock Score: 62/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett-Graham investor, I ask whether Tata Steel is a wonderful business at a fair price. The numbers show a large ₹2.29 lakh Cr market-cap steelmaker with improving momentum: sales grew 18.43%, profit 28.73%, and the latest quarter had sales of ₹57,002 Cr and net profit of ₹2,730 Cr. It generated ₹9,527 Cr free cash flow and has a Piotroski F-Score of 7/9, so operations are not broken. But quality is only moderate: ROE is 9.61%, ROCE 8.83%, below the 15%-plus I prefer, and debt/equity is 0.89 with a current ratio of 0.84. The Graham Number is ₹112.00, while the stock trades at ₹183.50, giving a negative margin of safety of -89.58%; P/B is 2.24 and P/E is 20.76 for a cyclical iron & steel business. That is not a classic Graham bargain. The DCF intrinsic value of ₹408.56 is much higher, but I treat DCF assumptions skeptically, especially with EV/EBITDA at 316.22 and Altman Z-Score at 2.24—neither gives me comfort. PEG of 0.08 looks cheap only because steel profits can swing widely; the 5-year revenue CAGR of 9.34% is steady, not explosive. Dividend yield of 2.18% and promoter holding of 33.19% are positives, but not enough to override the thin margin of safety. The FairStock Score of 62/100 (STEADY) fits my view: this is a cyclical business, not a predictable compounder. I would wait for a wider discount to intrinsic value or clearer ROCE improvement before buying.

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Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer