Tata Steel shares: In a morning report, ICICI Securities described Tata Steel’s quarterly results as ‘strong’. Ebitda for the quarter was Rs 6,264 crore, up from Rs 4,268 crore in the September quarter, owing primarily to lower raw material costs.
Tata Steel Ltd’s shares were trading flat on Thursday, a day after rising nearly 4% on China policy easing, after the Tata group firm reported a net profit of Rs 515 crore for the December quarter, compared to a loss of Rs 6,511 crore in September and Rs 2,224 crore in the year-ago quarter. The steelmaker will have an earnings conference call later today at 12.30 p.m. Total operating income for the quarter was Rs 55,312 crore, a 3% decrease year on year, with steel sales volume of 7.15 million tonnes (flat YoY). Ebitda for the quarter was Rs 6,264 crore, up from Rs 4,268 crore in the September quarter, owing primarily to lower raw material costs.
Despite the EU’s ongoing difficulties, Motilal Oswal stated that Tata Steel’s Q3 results beat expectations due to the company’s operations in India. The brokerage anticipated making Rs 600 crore in profit. According to Motilal Oswal, revenue was 10% less than its projected amount of Rs 61,400 crore. The lower blended average selling price (ASP), which was Rs 77,359 per tonne, was the reason for the decline in income. According to Motilal, it was 6% less than their estimate of Rs 82,549 per tonne. Ebitda was 25 percent higher than Motilal’s projection of Rs 5,000 crore. Motilal Oswal reported that the EBITDA margin increased to 11.3 percent, with lower input costs in the India segment driving the increase. Ebitda per tonne was Rs 8,760, more than Motilal’s projection of Rs 6,743.
According to Shreyansh Shah, a Research Analyst at StoxBox, Tata Steel’s figures were robust, owing primarily to strong domestic demand, which offset negative results from its European affiliate. “The price increase for coking coal had a moderating effect. But despite these drawbacks, Tata Steel was still able to outpace its Ebitda, which increased by a noteworthy 52.7% year over year. Although increased coking coal costs offset the benefits, the company’s overall performance can be attributed to a spike in steel prices amid robust demand driven by significant infrastructure spending. The company’s growth is on track, and we think that if the difficulties of its western subsidiaries are taken into consideration, it will eventually have strong financial results,” Shah stated.
“In addition, the steelmakers’ strategy of leveraging pan-India growth and branded presence will help them grow at a faster rate in the high-margin business in the medium term.” With ongoing development in the Automotive Infrastructure and Construction areas and an increase in government investment, our prognosis for the steelmaker remains favorable,” Shah added. In a morning report, ICICI Securities described Tata Steel’s quarter performance as ‘healthy’. Morgan Stanley reportedly maintained its ‘Equal weight’ rating on the stock, with a target price of Rs 120 per share. Domestic EBITDA contributed to both high realization and lower expenses, according to ET NOW’s tweet from Morgan Stanley. Despite Europe’s difficulties, consolidated EBITDA was even higher, according to ET NOW.
CLSA’s target price for Tata Steel is Rs 145 per share, and it has maintained its “Outperform” rating. CLSA claimed Tata Steel’s India business profitability was far higher than anticipated, according to CNBC TV18.
“On a QoQ basis, standalone operations posted adjusted EBITDA per tonne of Rs 16,903 as opposed to Rs 13,564 in Q2FY24. Revenues in Europe totaled £1,842 million, with an EBITDA loss of £276 million, according to ICICI Securities.
