Tata Steel share value surged 8 per cent to a new 52-week higher at Rs 1,188.65 apiece intraday on BSE soon after the firm recorded its very best-ever overall performance throughout the January-March quarter of FY21. The firm on Wednesday reported a 250 per cent on-year rise in consolidated EBITDA to Rs 142 bn (its highest ever) on the back of larger steel costs. Tata Steel stock value surpassed its higher of Rs 1,128.80 apiece, touched in the earlier session. The stock has rallied practically 12 per cent so far in May, even though it surged 20 per cent in the earlier month. On a year-to-date (YTD) basis, Tata Steel shares have soared 85 per cent from Rs 643.10 apiece. Analysts at CLSA stay bullish on the stock and have maintained a ‘buy’ rating to it.
With sturdy steel costs and EBITDA generation outlook, CLSA believes FY22 deleveraging is probably to be larger than the company’s guidance. “The outlook for steel prices, European profitability, and timeline for Kalinganagar expansion will be key from the call,” it added. Earlier this week, Tata Steel posted a consolidated profit of Rs 6,644.1 crore in fourth quarter of FY21 as compared to a loss of Rs 1,481.3 crore in the year-ago quarter. The company’s consolidated income from operations stood at Rs 49,977.4 crore, up by 38.8 per cent more than Rs 36,009.4 crore in the corresponding quarter of the earlier fiscal.
Around 23.61 lakh shares of Tata Steel exchanged hands on BSE, even though a total of 4.74 crore stocks have traded on NSE so far in the session. Tata Steel stock has witnessed a spectacular rally, with costs gaining more than 14% this week alone, on the back of a rally in worldwide steel costs amidst a provide crunch, stated Aamar Deo Singh, Head Advisory, Angel Broking. Singh told TheSpuzz Online that decarbonisation efforts in China are also fueling the up move in Tata Steel shares.
Those at Edelweiss Research see 10 per cent more upside in Tata Steel shares and have offered a target value of Rs 1,300 apiece, post Q4 numbers. They stated that favourable steel cycle and Europe in the sweet spot will complement the twin concentrate on development and debt reduction. Further improvement in European spreads will be positive for Tata Steel stocks.
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