SynopsisTata Steel's shares dipped despite a 147% surge in Q4 FY26 net profit to Rs 2,965 crore. Analysts are divided, with JPMorgan downgrading to 'Neutral' citing regulatory headwinds in the Netherlands and project delays, while Morgan Stanley maintains 'Overweight' on strong domestic and UK performance.ETMarkets.comTata Steel's stock dropped even as its Q4 earnings surged. Analysts offer mixed views.Shares of Tata Steel fell as much as 3.7% to an intraday low of Rs 209 on the NSE on Monday despite the company reporting a sharp rise in Q4 earnings. Consolidated net profit surged 147% year-on-year (YoY) to Rs 2,965 crore in Q4FY26, compared with Rs 1,201 crore in the year-ago period, while revenue from operations increased 13% to Rs 63,270 crore from Rs 56,218 crore.On a sequential basis, profit rose 9% against Rs 2,730 crore reported in Q3FY26, while revenue climbed 11% from Rs 57,002 crore recorded in the October-December quarter.EBITDA for the quarter stood at Rs 9,953 crore, compared with Rs 6,762 crore in Q4FY25, marking a 47% increase. For the full financial year, Tata Steel reported a net profit of Rs 10,886 crore, more than three times higher than the Rs 3,174 crore posted in the previous year. Annual turnover rose 6.4% to Rs 2.32 lakh crore from Rs 2.18 lakh crore in FY25.Tata Steel share price: What should you do?JPMorgan has downgraded Tata Steel to ‘Neutral’ with a target price of Rs 220 (1.3% upside) after the stock rallied 38% over the past year against a 5.5% decline in the Nifty. The brokerage cited near-term regulatory cost headwinds in the Netherlands as a key reason for the downgrade. It highlighted risks related to the early closure of coke and gas plants in the Netherlands, which could lead to higher raw material, freight and employee restructuring costs, partly offset by lower carbon emission costs.JPMorgan also flagged project delays in the UK electric arc furnace project due to electricity connectivity issues and a delay in the final investment decision for the India-NINL project, now expected in the July-September quarter. While the brokerage expects margin improvement in the India and UK businesses in Q1FY27, it sees pressure on margins in the Netherlands due to production losses at the DRI steel plant after emission limits were exceeded. It has also cut its FY28 EBITDA estimates by 2%, citing regulatory uncertainty in the Netherlands and geopolitical tensions in the Middle East as potential risks to earnings growth.On the other hand, Morgan Stanley has maintained an ‘Overweight’ rating on the stock with a target of Rs 215/share, lower than the last close of Rs 217. The brokerage said consolidated EBITDA in Q4FY26 came in 4% ahead of estimates, led by better-than-expected performance across the domestic, UK and European businesses. The Wall Street major said policy support in the UK and Europe is likely to aid steel prices and profitability, and remains positive on the recovery in overseas operations and expansion in domestic margins.Motilal Oswal Financial Services has maintained a ‘Buy’ with a target price of Rs 250, implying an upside potential of 15%. The brokerage expects EBITDA improvement in the company’s European operations over the coming quarters, driven by ongoing cost restructuring measures, improving steel prices and regulatory support such as CBAM and lower import quotas to aid domestic businesses. While near-term risks linked to price volatility and emission-related challenges in Europe remain, the brokerage said Tata Steel’s long-term outlook continues to stay strong and retained its FY27 and FY28 earnings estimates, supported by better volumes and an improving pricing environment.Management commentaryCommenting on the performance, T. V. Narendran, MD, Tata Steel, said FY26 was marked by global economic uncertainty and tariff-driven trade disruptions, but the company maintained stable operational performance through cost optimisation and disciplined execution. He said Tata Steel India achieved record deliveries of around 22.5 million tonnes, aided by growth in downstream businesses including tubes, tinplate, wires and branded products.Narendran added that the company strengthened its automotive segment presence through faster customer approvals at Kalinganagar and expanded the reach of Tata Tiscon across nearly all districts in India. He also highlighted strong growth in digital commerce platforms and engineering segment volumes, along with ongoing investments in projects such as the new electric arc furnace at Ludhiana and the proposed expansion at NINL.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. 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