#tatasteel share price gained over a percent in the morning trade on November 21 after international brokerage Jefferies maintained a positive outlook on the company.

Its analysts expect Tata Steel's India margins to expand in the December quarter and Tata Steel Europe (TSE) losses to narrow by Q4 FY24. The brokerage sees up to 40 percent upside in the stock in a bull case scenario.

Tata Steel's European business is facing severe margin pressure due to the ongoing restructuring in the UK (TSUK) and blast furnace relining in the Netherlands (TSN). Since the TSN relining is expected to be completed by December, Jefferies expects it to lift profitability in the fourth quarter.

The company’s UK margin may also improve from the current lows but is likely to remain weak during the transition period of building a new 3mtpa EAF over the next three years, the brokerage said.

Analysts at Jefferies like Tata's improving asset footprint with rising Indian share in total volumes.

"Asian steel spread has already contracted to the lowest level in a decade, and any positive developments in China could provide upside," they said. In the base case scenario, the brokerage has pegged target price at Rs 145.

Better Asian steel spreads and sequential improvement in margins are expected to be the key triggers for the stock.

In an upside scenario, the brokerage sees up to 40 percent rally in the counter to Rs 175 a share. However, emissions, energy management and factors such as human rights and community relations, air quality, and employee health and safety remain some of the key material issues, it said.