Tata Steel Jumps 6% On Announcing Job Cuts In Dutch Unit, Analysts' See Up To 33% Upside
Tata Steel's cost-cutting initiative aims to save over €500 million across FY26–27 as part of a broader effort to restore profitability
Tata Steel Share Price: Shares of Tata Steel rallied up to 6% on Friday, touching Rs 134.95 on the BSE, after the company announced a major restructuring move involving the elimination of 1,600 jobs in the Netherlands. The cost-cutting initiative, primarily targeting the IJmuiden plant, aims to save over €500 million across FY26–27 as part of a broader effort to restore profitability in its struggling European operations.
The steelmaker plans to slash around 20% of its Dutch workforce, mainly impacting management and support functions, as it seeks to centralise and streamline operations amid mounting pressure from low-cost Chinese imports, rising U.S. tariffs, and regulatory demands to curb emissions. Tata Steel’s Dutch division reported a €556 million loss in FY24, driven by high energy costs and declining demand, with the IJmuiden plant under scrutiny for its environmental impact.
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The aggressive restructuring plan boosted investor sentiment, with several brokerages weighing in on the long-term implications.
JPMorgan maintained an “Overweight" rating and a target price of Rs 180, citing the company’s structural cost actions as a key positive, even amid macro headwinds.
Macquarie reiterated an “Outperform" rating with a Rs 156 target, noting the restructuring would support cost optimisation and green capex. It expects the savings to materialise starting Q2 FY26 and be fully realised by Q4 FY26, with no major capex burden.
CLSA kept a “Hold" call with a Rs 145 target, seeing moderate upside. It said the plan could enhance profitability by €80 per tonne, thanks to a 15% reduction in controllable costs.
Citi, however, stuck with a “Sell" rating and a Rs 115 target, highlighting concerns over the broader impact of global tariffs and demand risks, despite acknowledging a potential $70–80 per tonne EBITDA uplift from the overhaul.
While the cost rationalisation efforts have sparked a positive reaction in the market, analysts remain split on Tata Steel’s ability to navigate near-term challenges while executing its long-term transformation strategy.
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