Tata Group Large Cap Metal Stock Falls 2.44% Intraday, 5% In 1 Week; Buy?

Shares of large cap Tata Group metal & ferrous sector stock, Tata Steel shares witnessed decline of 2.44% intraday today to Rs 120.10 per share at the time of writing the report as BSE Sensex declined 279.75% points to 65,117 and Nifty tumbles 98 points to 19,444 on Monday. Asian shares also traded lower on Monday amid surging risks of bigger conflict in the Middle East and rising bond yields also exerted pressure on the stocks.

Earlier this month on October 9, amid easing risk from UK Operations, the Issuer Default Rating (IDR) of Tata Steel was upgraded to 'BBB-' from 'BB+' by Fitch Ratings. The upgrade arose after Tata Steel's standalone credit profile (SCP) was revised to 'bb+' from 'bb'. The revision was made after decline in uncertainty and financial risk from its UK operations.

Fitch Ratings feels that Tata Steel's UK operations' cost competitiveness will improve in next few months. Tata Steel will replace its b/last furnaces with more cost-efficient and environment-friendly electric arc furnace (EAF)-based steel-making capacity.

"We expect EBITDA leverage to decline over the next three years on higher capacity, output and EBITDA. TSL aims to roughly double its capacity in India by 2030, but we think risks to its financial profile are mitigated by its focus on maintaining net debt/EBITDA, based on its calculations, of 2.0x or lower," said Fitch Ratings on Monday.

Tata Steel Stock Performance & Return: Current market price of Tata Steel share price on BSE is Rs 120.10 per share after the fall of 2.44%. Its 52-week high price is Rs 134.85 per share and 52-week low price is Rs 98.15 per share, respectively. The large cap company has a market capitalisation of Rs 1,46,761.09 crore. Tata Steel shares declined 4.72% in last 1-week, gave return of 14% in last 6-months, offered rally of 21% in last 1-year, and surged 186% in last 3-years. In last 5-years, Tata Steel shares gave return of 122%.

Tata Steel Valuation: Brokerage firm BOB Capital assigned buy call and revised the target price of Tata Steel from Rs 145 to Rs 155 apiece in its September 25 report. According to brokerage firm BOB Capital, "We raise our SOTP-based TP to Rs 155 (from Rs 145) as we hike our FY26E EV/EBITDA multiple for European operations to 5.5x (from 4.5x), keep Indian operations at 6x and add in Rs 6/sh for the TSUK transition. We remain confident of TATA's ability to deliver earnings-accretive growth and maintain BUY."

Tata Steel About: Tata Steel group is among the top global steel companies with an annual steel production capacity of ~34 million tonnes per annum (MTPA). Tata Steel (TSL) is one of the world's most geographically diversified steel producers, with operations and commercial presence across the world. Since 2016, TSL has been consistently ranked among the top 10 steel companies in the DJSI Corporate Sustainability Assessment, according to its official website.

Disclaimer

The stock has been picked from the brokerage report of BOB Capital. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.