Tata Steel Ltd. share price target

Elephant set to dance despite getting enormous We see Usha Martin (UML) steel business acquisition as a smart move given the attractive discount of 30% to greenfield cost for a well-integrated asset providing product diversification and synergy benefits. We see that Net Debt/EBITDA for consolidated operations including both Bhushan (BSL) and UML (excl. European business which is getting shifted to JV) is likely to remain in a comfortable zone of 3.1x in FY20E (vs 2.9x at FY18 end) led by strong cash flows of domestic business given the favorable steel cycle and low cost metrics. We expect TSL to abandon...

Other income increased 123% to Rs 347.26 crore. Interest cost was up 24% to Rs 1670.14 crore. Depreciation rose 20% to Rs 1805.63 crore. PBT before EO reported was 46% higher to Rs 3339.16 crore. The company had net EO...

Revenue increased by 4.85% to Rs. 37434.03 Cr in Q1FY19 when compared to the previous quarter. Tata Steel Ltd Q1FY19 results Comment

Tata Steel reported a steady set of operational Q1FY19 numbers. Indian operations reported sales volume of 2.97 million tonnes (MT) (up 8% YoY, down 2% QoQ) marginally lower than our estimate of 3.1 MT. European operations reported steel sales of 2.45 MT (up 1% YoY, down 5% QoQ) broadly in line with our estimate of 2.4 MT The consolidated topline came in at | 37833 crore (up 28% YoY, 5% QoQ). EBITDA/tonne of domestic operations were at | 17078/tonne (vs. Q4FY18:| 15872/tonne, Q1FY18:| 10786/tonne), marginally higher...

Balance sheet discipline to determine stock performance Tata Steel reported consolidated EBITDA of INR 64.7bn, in-line with JMfe. Indian operations delivered a multi quarter high EBITDA per ton of INR 17k driven by higher realisations. Corus performance improved significantly, driven by higher realisation and better operational efficiency. Strong performance in standalone and European operations were significantly offset by an adverse forex movement of c.INR 11bn at financing entities. Bhushan Steel reported an EBITDA of 46bn in 1QFY19 implying an EBITDA/t of INR 9.7k/ton. We continue to remain positive on the steel cycle and factor in normalized spreads for Indian and...

Tata Steel (TATA) has signed a definitive agreement with ThyssenKrupp (TK) to spin off its European steel assets into a 50:50 joint venture (JV). This clears the uncertainty around valuations. The entity will be called ThyssenKrupp Tata Steel BV (TKTS). The terms of the agreement might be a little different from the MoU signed in September 2017. TKTS will be managed by a two-tier board structure (management and supervisory) with equal representation. TATA will move EUR2.5b of debt and TK will move EUR4b of unfunded pension liabilities into TKTS as decided earlier. However, TK will now have higher economic interest of 55% in case the JV decides for an IPO. The additional 10% economic interest will be monetized by TK in the IPO so that the commitment to maintain equal holding for six years is not breached

ICICI Securities Ltd | Retail Equity Research Tata Steel (TSL) and ThyssenKrupp AG have signed a definitive agreement to combine their European steel businesses in a 50:50 joint venture to be named ThyssenKrupp Tata Steel BV headquartered at Amsterdam, Netherlands. While the definitive agreement largely remained in line with the MoU signed in September 2017, the only tweak is with regard to higher economic interest in ratio of 55:45 favouring ThyssenKrupp at the time of initial public offering (IPO). The completion...

Tata steel consolidated net sales rose 7% to Rs 36132.3 crore in Q4FY18 compared to Q4FY17. The company operating margins fell 280 bps to 18%. %. As a result operating profits decreased 7% to Rs 6498.91 crore. Cost of material consumed as a percentage of net sales (net of stock adjustment) decreased 10 bps to 29.1%. Purchase of stock in trade was down 20 bps to 8%,...

ICICI Securities Ltd | Retail Equity Research Tata Steel reported a healthy Q4FY18 performance primarily on the back of higher realisations. The Indian operations posted sales volume of 3.03 million tonnes (MT) while European operations reported steel...

Revenue increased by 7.97% to Rs. 35737.19 Cr in Q4FY18 when compared to the previous quarter. Tata Steel Ltd Q4FY18 results Comment