Shares of Tata Steel will turn pre-split on Thursday, ahead of its record date. The company has announced a stock split on its equity shares in the ratio of 10:1. Tata Steel is already in focus this week ahead of its June 2022 quarterly results and sub-division of equity shares. In the first quarter of FY13, Tata Steel’s profits were under pressure, while revenues showed double-digit year-on-year growth but declined sequentially. In India, the company’s deliveries were marginally lower due to sluggish exports, while business in the European market was thriving. Going forward, most analysts have given a buy rating to Tata Steel.
on BSE, Tata Steel shares expired above 959.45 10 or 1.05%. The market cap of the company is approx. 1,17,165.68 crores.
Tata Steel sets July 29 as the record date for A stock split of 10:1. Thus, the shares will become pre-split on July 28. The 10:1 ratio means that Tata Steel will issue 10 equity shares, each of which will have a face value of Re 1 on each existing share. 10 each.
In Q1FY23, Tata Steel posted a consolidated net profit of 7764.96 crore is less than 12.83% per annum and 20.4% qoq. consolidated revenue stood at 63,430 crore is up 18.6% year-on-year but down 8.5% quarter-on-quarter.
In India, the company’s deliveries were marginally lower at 2% YoY due to reduction in exports after levying 15% export duty. As a result, home delivery was successfully scaled up by leveraging our strong marketing network and agile business model. Here, the revenue per tonne increased by 8,534 sequentially 83,625 per tonne on account of long-term contracts and product mix. Meanwhile, it reported an EBITDA of 9,582 crore, which translates into EBITDA per tonne 23,557.
Meanwhile, in Europe, during Q1FY23, revenue per tonne increased from £154 QoQ to £1,248 per tonne due to longer-term contracts and product mix. In addition, the company achieved its highest ever quarterly EBITDA at £621 million, which translates to EBITDA per tonne of £290.
Should you invest in Tata Steel shares?
Ashish Kejriwal Research Analyst and Kunal Kothari Research Associate at Centrum said, “The profitability of TSI is expected to decline in Q2FY23 (Q2FY23E EBITDA/t ~Rs 14,300), driven by lower steel prices, lower cost of coking coal. and is marginally offset by higher volumes. The full impact of lower coking coal prices will be visible in Q3 FY23, leading to improved margins. TSE’s higher cost of coking coal due to lower prices and lag effect Profitability is also expected to fall.”
Both said, “We expect to release working capital in the second half of FY23. A 6mtpa pellet plant and a 2.2mtpa cold rolled mill are expected to be commissioned in H2FY23. Higher operating profit will help Tata in FY23. With net debt of ~533bn, it will help in further leverage.FY23‐end (FY22E‐end: ~Rs576bn) after including the impact of NINL acquisition (~Rs.121bn) which was completed on 4th July 2022 We do not expect any further major acquisitions by TATA in FY23. The stock split of TATA will be 10:1 on July 29. We have retained the BUY with a target price of Rs 1,368.”
Further, analysts Ashutosh Somani and Heath Vora of JM Financial said, “The growth capex towards 5mtpa Kalinganagar expansion is progressing well. The company expects to commission the 6mtpa pellet plant at Kalinganagar in 3QFY23, followed by Expected 2.2MTPA CRM expansion and 5MTPA BF expansion in 4QFY23. By the end of FY24. Commissioning of pellet plant at Kalinganagar will help in cost reduction. Net credit increased during the quarter 545 billion (up) 35 billion) due to increase in working capital due to volatility in commodity prices. The company completed the acquisition of NINL during the quarter and expects the acquisition to enhance the long products business. The company is committed to its annual delivering target of $1 billion. We believe a balanced strategy of de-leveraging, growth and shareholder returns augurs well for the company. Buy keep.”
JM Financial Analysts has fixed a target price of 1,230 each on Tata Steel.
On the other hand, Abhijit Mitra, Mohit Lohia, and Pritish Urumkar Research Analysts at ICICI Securities said, “Tata Steel (TSL) consolidated surprise EBITDA on the back of strong Tata Steel Europe (TSE) EBITDA. TSE EBITDA expands to $365/ te. (above $120/te qoq) with support from contract receivables, favorable RM movement, and low energy costs.”
The trio said, “The negative EBITDA for Tata Steel’s long products is attributed to higher thermal coal prices as well as NRV provisions. 780 crores on coking coal and iron ore. We maintain REDUCE with an unchanged target price of Rs 827/share while waiting for the EBITDA contraction cycle to turn (we expect the downcycle to last 4-5 quarters and peak in Q2 FY22) .
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
Tata Steel shares will be liquidated tomorrow. Should you invest?
Shares of Tata Steel will turn pre-split on Thursday, ahead of its record date. The company has announced a stock split on its equity shares in the ratio of 10:1. Tata Steel is already in focus this week ahead of its June 2022 quarterly results and sub-division of equity shares. In the first quarter of FY13, Tata Steel’s profits were under pressure, while revenues showed double-digit year-on-year growth but declined sequentially. In India, the company’s deliveries were marginally lower due to sluggish exports, while business in the European market was thriving. Going forward, most analysts have given a buy rating to Tata Steel.
on BSE, Tata Steel shares expired above 959.45 10 or 1.05%. The market cap of the company is approx. 1,17,165.68 crores.
Tata Steel sets July 29 as the record date for A stock split of 10:1. Thus, the shares will become pre-split on July 28. The 10:1 ratio means that Tata Steel will issue 10 equity shares, each of which will have a face value of Re 1 on each existing share. 10 each.
In Q1FY23, Tata Steel posted a consolidated net profit of 7764.96 crore is less than 12.83% per annum and 20.4% qoq. consolidated revenue stood at 63,430 crore is up 18.6% year-on-year but down 8.5% quarter-on-quarter.
In India, the company’s deliveries were marginally lower at 2% YoY due to reduction in exports after levying 15% export duty. As a result, home delivery was successfully scaled up by leveraging our strong marketing network and agile business model. Here, the revenue per tonne increased by 8,534 sequentially 83,625 per tonne on account of long-term contracts and product mix. Meanwhile, it reported an EBITDA of 9,582 crore, which translates into EBITDA per tonne 23,557.
Meanwhile, in Europe, during Q1FY23, revenue per tonne increased from £154 QoQ to £1,248 per tonne due to longer-term contracts and product mix. In addition, the company achieved its highest ever quarterly EBITDA at £621 million, which translates to EBITDA per tonne of £290.
Should you invest in Tata Steel shares?
Ashish Kejriwal Research Analyst and Kunal Kothari Research Associate at Centrum said, “The profitability of TSI is expected to decline in Q2FY23 (Q2FY23E EBITDA/t ~Rs 14,300), driven by lower steel prices, lower cost of coking coal. and is marginally offset by higher volumes. The full impact of lower coking coal prices will be visible in Q3 FY23, leading to improved margins. TSE’s higher cost of coking coal due to lower prices and lag effect Profitability is also expected to fall.”
Both said, “We expect to release working capital in the second half of FY23. A 6mtpa pellet plant and a 2.2mtpa cold rolled mill are expected to be commissioned in H2FY23. Higher operating profit will help Tata in FY23. With net debt of ~533bn, it will help in further leverage.FY23‐end (FY22E‐end: ~Rs576bn) after including the impact of NINL acquisition (~Rs.121bn) which was completed on 4th July 2022 We do not expect any further major acquisitions by TATA in FY23. The stock split of TATA will be 10:1 on July 29. We have retained the BUY with a target price of Rs 1,368.”
Further, analysts Ashutosh Somani and Heath Vora of JM Financial said, “The growth capex towards 5mtpa Kalinganagar expansion is progressing well. The company expects to commission the 6mtpa pellet plant at Kalinganagar in 3QFY23, followed by Expected 2.2MTPA CRM expansion and 5MTPA BF expansion in 4QFY23. By the end of FY24. Commissioning of pellet plant at Kalinganagar will help in cost reduction. Net credit increased during the quarter 545 billion (up) 35 billion) due to increase in working capital due to volatility in commodity prices. The company completed the acquisition of NINL during the quarter and expects the acquisition to enhance the long products business. The company is committed to its annual delivering target of $1 billion. We believe a balanced strategy of de-leveraging, growth and shareholder returns augurs well for the company. Buy keep.”
JM Financial Analysts has fixed a target price of 1,230 each on Tata Steel.
On the other hand, Abhijit Mitra, Mohit Lohia, and Pritish Urumkar Research Analysts at ICICI Securities said, “Tata Steel (TSL) consolidated surprise EBITDA on the back of strong Tata Steel Europe (TSE) EBITDA. TSE EBITDA expands to $365/ te. (above $120/te qoq) with support from contract receivables, favorable RM movement, and low energy costs.”
The trio said, “The negative EBITDA for Tata Steel’s long products is attributed to higher thermal coal prices as well as NRV provisions. 780 crores on coking coal and iron ore. We maintain REDUCE with an unchanged target price of Rs 827/share while waiting for the EBITDA contraction cycle to turn (we expect the downcycle to last 4-5 quarters and peak in Q2 FY22) .
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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