Tata Steel shares are attracting significant attention following the company's strong Q3FY26 operational performance and positive analyst ratings, despite recent stock underperformance. The steel major achieved record quarterly production and deliveries while securing bullish recommendations from leading brokerages.

Record Production and Delivery Performance

Tata Steel India delivered exceptional results with crude steel production rising 11.40% year-on-year to 6.34 million tonnes in Q3FY26, compared with 5.69 million tonnes in the corresponding quarter last year. This marked the company's best-ever quarterly crude steel production, driven by higher output at Jamshedpur and Kalinganagar facilities.

Delivery volumes showed equally impressive growth, with Tata Steel India crossing the 6.00 million ton milestone for the first time. India deliveries reached 6.04 million tonnes, up 14.00% from 5.29 million tonnes in the year-ago quarter, supported by strong domestic market demand.

Mixed International Operations Performance

While Indian operations excelled, the company's international business faced challenges. Tata Steel Netherlands reported a 4.50% decline in production to 1.68 million tonnes, with sales volumes falling 8.50% to 1.40 million tonnes year-on-year due to seasonal factors and subdued market dynamics.

Tata Steel UK saw delivery volumes decline 9.00% to 0.52 million tonnes, with production remaining nil as both blast furnaces have ceased operations. However, Tata Steel Thailand delivered relatively stronger performance with production rising 19.00% year-on-year to 0.31 million tonnes.

Strong Brokerage Support Despite Stock Underperformance

HSBC has maintained a 'Buy' rating on Tata Steel with a price target of ₹215.00, expressing surprise at the stock's underperformance given its sizeable European footprint of around 7.00 million tonnes. The brokerage highlighted that European steel companies have rallied sharply over the past six months, gaining between 29.00% and 63.00%, as the Carbon Border Adjustment Mechanism comes into effect.

Morgan Stanley also remains constructive on the stock, maintaining an 'Overweight' rating with a price target of ₹200.00. The brokerage mentioned strong momentum in the Indian business and noted that while volumes in Netherlands and UK were under pressure sequentially, India operations continue to anchor overall performance.

Business Vertical Excellence and Digital Growth

The company's domestic operations demonstrated outstanding performance across key business verticals. Automotive & Special Products achieved best-ever quarterly volumes of approximately 0.90 million tons, with quarterly volumes rising 20.00% year-on-year. Branded Products & Retail surpassed 2.00 million tons for the first time, driven by established brands including Tata Tiscon, Tata Astrum, and Tata Steelium.

The company's e-commerce platforms showed exceptional growth with Gross Merchandise Value from Tata Steel Aashiyana and DigECA reaching ₹2,380.00 crores for Q3FY26, registering 68.00% year-on-year growth. HSBC expects European steel prices to rise further and sees upside risks to estimates for Tata Steel Netherlands, while Tata Steel shares settled 1.42% lower at ₹183.55.

India's Competition Commission has found major steelmakers including Tata Steel Ltd., JSW Steel Ltd., and state-owned Steel Authority of India Ltd. in violation of competition law through price collusion, according to a Reuters exclusive report. The investigation marks one of the most high-profile regulatory actions against the country's steel industry giants.

Investigation Findings and Evidence

The Competition Commission of India probe has identified 28 firms in breach of antitrust norms, with collusion activities spanning between 2015 and 2023. The investigation has also held 56 top executives liable for price fixing, including prominent industry leaders such as JSW Managing Director Sajjan Jindal, Tata Steel CEO T.V. Narendran, and four former SAIL chairpersons.

According to an internal CCI document, officials uncovered WhatsApp messages exchanged among regional industry groups that suggested price fixing and production curbs. This digital evidence forms a crucial part of the case against the steel companies.

Market Response and Company Reactions

Following the Reuters report, shares of JSW Steel, SAIL and Tata Steel fell during trading, while the Nifty Metal index also turned negative. The market reaction reflects investor concerns about potential penalties and regulatory implications for the steel sector.

Investigation Background and Expansion

The Competition Commission investigation commenced in 2021 following allegations from a builders' association in a case filed before a Tamil Nadu state court. The group alleged that steel companies were collectively restricting supply and artificially inflating prices.

The probe was subsequently expanded to cover up to 31 companies and industry groups, along with dozens of executives. Reuters had previously reported that the watchdog conducted raids on several steel companies as part of the broader industry investigation.

Regulatory Process and Potential Penalties

The Competition Commission's order, dated October 6, states that the investigation has "found the conduct of the parties to be in contravention" of Indian antitrust law. The findings will undergo review by senior CCI officials, with companies and executives granted the opportunity to submit objections before a final order is issued.

Under antitrust regulations, the Competition Commission possesses authority to impose substantial penalties on steel companies, with fines reaching up to three times their profit or 10% of annual turnover, whichever is higher, for each year of wrongdoing. Individual executives also face potential financial penalties for their involvement in the alleged collusion activities. India is the world's second-largest producer of crude steel, making this investigation particularly significant for the global steel market.