NSETata Steel shares traded more than a percent higher on May 31.
This comes two days after the homegrown steelmaker reported a 64.59% decline in its net profit for the January-March quarter of 2023-24, on lower realisations and certain exceptional items.The total income declined to ₹58,863.22 crore from ₹63,131.08 crore in the January-March period of FY23.
Lower coking coal prices should provide a cushion to margins.The brokerage, however, believes that weak Asian steel prices and imports from China pose some risk to Indian steel prices.Earlier on May 30, Reuters reported that Tata Steel wants to accelerate efforts towards decarbonisation in Britain, its chief executive has said.
This is in the backdrop of trade unions voting to strike against the company's plans to cut jobs.
"We want to move fast and build the new electric arc furnace faster, so that's why, for us, the timelines are clear," Tata Steel CEO and Managing Director TV Narendran told Reuters in an interview.
NSE
Tata Steel shares traded more than a percent higher on May 31. This comes two days after the homegrown steelmaker reported a 64.59% decline in its net profit for the January-March quarter of 2023-24, on lower realisations and certain exceptional items.The total income declined to ₹58,863.22 crore from ₹63,131.08 crore in the January-March period of FY23. Its revenues decreased 6% due to lower realisations but were partly offset by higher volumes in India.The company said exceptional items were primarily related to impairment of heavy-end assets and restructuring costs relating to the UK business.Following Tata Steel’s Q4 result , brokerage firm Morgan Stanley raised its target price on the stock to ₹145, implying it sees more than 11% downside from the closing price of May 30.The brokerage, which has an equal-weight call on the stock, pointed out that the management guided for some improvement in spreads in Q1FY25 across businesses. The closure of heavy-end assets in the UK is in sight and the Kalinganagar unit’s capacity will be ramped up in H2FY25, it added.Meanwhile, it expects FY25 to be a year of transition and deleveraging will take a back seat.Jefferies, on the other hand, has a buy call on the stock with a target price of ₹195, meaning it sees a potential upside of 18% in the stock price.This, even as it noted that the company’s standalone EBITDA/tonne fell 12% sequentially, pulled down by lower average selling price (ASP).The brokerage expects India volume to rise at an 11% compound annual growth rate (CAGR) over FY24-26 with the start of a new 5 mtpa capacity. Lower coking coal prices should provide a cushion to margins.The brokerage, however, believes that weak Asian steel prices and imports from China pose some risk to Indian steel prices.Earlier on May 30, Reuters reported that Tata Steel wants to accelerate efforts towards decarbonisation in Britain, its chief executive has said. This is in the backdrop of trade unions voting to strike against the company's plans to cut jobs."We want to move fast and build the new electric arc furnace faster, so that's why, for us, the timelines are clear," Tata Steel CEO and Managing Director TV Narendran told Reuters in an interview.
