The share price of Tata Steel hit a 52-week high of Rs 1,151.90, gaining over 4 percent on Friday after brokerages raised the price targets on the stock after the company’s March quarter earnings.
Tata Steel, on May 5, posted a consolidated net profit of Rs 6,644.1 crore in the fourth quarter of fiscal 2021 as compared to a loss of Rs 1,481.3 crore in the year-ago quarter.
Consolidated revenue from operations increased by 38.8 percent to Rs 49,977.4 crore from Rs 36,009.4 crore, YoY.
Morgan Stanley maintained Overweight rating on the stock and raised the target price (TP) to Rs 1,630 per share from Rs 1,000 earlier.
The brokerage sees the current steel cycle remaining higher for longer. "The company needs to have disciplined capital allocation and a strong focus on de-leveraging," it said.
The structural repair of balance sheet will improve Tata Steel’s resilience in any downcycle, it said.
Jefferies raised the target to Rs 1,500 from Rs 1,150 while maintained a Buy call. It upgraded FY22-23 EBITDA estimates by 28-48 percent and EPS by 51-81 percent.
The stock continues to trade at a reasonable valuation, Jefferies said.
JPMorgan said that Tata Steel made a positive commentary on prices, margins, capex and debt.
The brokerage increased FY22E/23 adjusted EBITDA by 28 percent/5 percent.
JPMorgan maintained an Overweight rating and increased the target price to Rs 1,425 per share from Rs 1,250 earlier.
Citi maintained a Buy call and raised the target to Rs 1,375 per share from Rs 1,200 earlier. It also raised the FY22-23 EBIDTA estimate by 13 percent/12 percent.
Citi believes that there was a resilient demand in both China and overseas. It expects steel prices to go higher for longer.
At 10:20 am, the shares of Tata Steel were trading 3.19 percent higher at Rs 1,135.70 apiece on the BSE.
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