Tata Steel Share Price: Tata Group's steelmaker, Tata Steel witnessed share correction of more than 5% during the trading week from December 16-20th. Going ahead, brokerage JM Financial is expecting overall steel industry players to see mixed trend in spreads. Amidst this, brokerage JM Financial has recommended BUY on Tata Steel.
Tata Steel Share Price:
Last week, on Friday, the stock price was at Rs 140.85 apiece, down by 1.71% on BSE. The market cap was around Rs 1,75,829.29 crore. Overall, in the trading week from December 16-20th, the stock dropped by 5.02%. The stock's 52-week high and low is at Rs 184.60 apiece and Rs 127.80 apiece respectively.
In six months, the stock plunged by nearly 21%. YTD, the stock is in green with 1% gains.
The metal giant holds a strong record of dividends, while it has delivered 1 bonus issue and 1 stock split in its 24 years of performance.
Bonus Issue: The first ever bonus issue by Tata Steel was of a 1:2 ratio and its ex-date was on August 12, 2004. The ratio meant that Tata Steel delivered 1 free share on the existing 2 shares.
Stock Split: The sub-division of Tata Steel stock took place in 2022 in the ratio of 1:10 and its ex-date was on July 29 of that year. The face value of Rs 10 each of Tata Steel was split to Rs 1 each. This was also its first time splitting.
Dividends: Since May 2001, Tata Steel stock has delivered about 30 dividends, as per Trendlyne data. In the past 12 months, the stock has distributed about Rs 3.60 per share dividend. Its current dividend yield is at 2.43%.
BUY Tata Steel Stock:
In its latest report on overall steel sector, brokerage JM Financials' note said, "Indian steel markets witnessed a divergent price trend with long product prices moving up by ~INR1.5k/t while flat product prices declined by ~INR2k/t. Global steel making raw materials witnessed mixed trends - spot coking coal marginally down by USD9/t QoQ to ~USD202/t, iron ore marginally up QoQ at ~USD95/t. Spreads of Indian steel players are likely to witness mixed trends for flats and longs player given expectation of lower coking coal consumption cost (~-USD20-25/t) but divergent trends in realizations. Consequently, we estimate a marginal uptick in EBITDA for the 'long' players and marginal decline in margins for the 'flat' players. Volumes are expected to trend upwards in 3Q given lower seasonal base in 2Q and better expected demand in 2H (JPC consumption data shows a growth of ~6% in OctNov'24 QoQ); to further drive margin expansion."
Amidst this, JM Financial has suggested BUY on Tata Steel for target price of Rs 175.
Other brokerages like BOB Capital Markets and Axis Direct have also recommended BUY with Rs 175 target price. On the other hand,
On the other hand, brokerage IDBI Capital said, "Tata Steel's Q2FY25 profitability exceeded our expectations. Sales declined by 2% QoQ to Rs539bn, primarily due to a 3% QoQ drop in realizations, resulting from a sharp fall in steel prices. However, Sales volume grew by 2% QoQ to 7.52mn tonnes, driven by growth in India and the Netherlands operations. Despite this, EBITDA/t decreased by 10% QoQ to Rs8,167. UK operations reported EBITDA loss of Rs25,239/t in Q2FY25 vs. loss of 14,076/t in Q1FY25. Netherlands' EBITDA declined to Rs1,622/t in Q2FY25 from Rs3,075/t in Q1FY25, due to lower realisations and an increase in other overheads."
IDBI's note said,"Tata Steel reiterated volume growth guidance of 1.0-1.4mn tonne for FY25. We cut our FY25/FY26 EBITDA estimate by 18%/4%, respectively and value the stock based on FY26E EV/EBITDA multiple of 6.5x to derive target price of Rs156 and maintain our HOLD rating on the stock."
Tata Steel, with an annual crude steel capacity of 35 million tonnes per annum (MnTPA), is one of the world's most geographically diversified steel producers.
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