Tata Steel Ltd. share price target

8 February 2020 Tata Steels (TATA) third-quarter result reflects the challenges faced by the industry, with consol. EBITDA/ton of INR3,614 dropping to the lowest level in the past 15 quarters due to a sharp decline in steel prices. Prices have recovered sharply over the past three months, strengthening the margin outlook. Given the challenges in the European business, we cut our FY20/21 EBITDA estimates marginally and maintain INR38.2b) in 3QFY20 due to weak steel spreads and higher exports from India. PAT loss was at INR7.0b (our EBITDA/t was down 6% QoQ at INR11,020 due to lower realization (-11% QoQ to INR44,522/t) and the higher share of margin- dilutive exports (18%). EBITDA, however, increased 9% QoQ to INR37.7b, driven by strong 15% QoQ growth in volumes (largely exports). We expect EBITDA/t to improve substantially in 4Q as the price hikes have materialized in the past three months we expect INR13,800 in 4QFY20.

Tata Steel Limited is a diversified steel producer. The Company is engaged in the business of steel making, including raw material and finishing operations.

Domestic operations to account for ~71% of capacity by 2025 In India, Tata Steel has operations in Jamshedpur (10 MT), Kalinganagar (3 MT), Tata Steel BSL (5.6 MT) and Tata Long products (1 MT), aggregating to 19.6 MT. Indian operations' key assets viz. Jamshedpur, Kalinganagar, Angul have globally cost competitive position, aiding overall EBITDA margins. Going forward, Tata Steel is planning to increase India capacity to 30 MT by 2025 through organic & inorganic routes, thereby increasing share of higher margin domestic capacity to 71% by 2025, auguring well for company....

Tata Steel Limited is a diversified steel producer. The Company is engaged in the business of steel making, including raw material and finishing operations.

In India, Tata Steel has operations in Jamshedpur (10 MT), Kalinganagar (3 MT), Tata Steel BSL (5.6 MT) and Tata Long products (1 MT), aggregating to 19.6 MT. Indian operations' key assets viz. Jamshedpur, Kalinganagar, Angul have globally cost competitive position, aiding overall EBITDA margins. Going forward, Tata Steel is planning to increase India capacity to 30 MT by 2025 through organic and inorganic routes, thereby increasing the share of the domestic capacity to 71% by 2025. Currently, the 5 MT Phase-II expansion at Kalinganagar is on track. Recent tax cuts, would benefit Indian...

Tata Steel Limited is a diversified steel producer. The Company is engaged in the business of steel making, including raw material and finishing operations.

Tata Steel is a leader in the global steel industry with operations spanning across 26 countries with key operations in India, Netherlands and United Kingdom. Company primarily caters to customers in automotive,...

Tata Steel Ltd has recorded moderate consolidated sales growth of 1.3 percent to Rs. 359471 Mn in Q1FY20 as against Rs. 354941 Mn in Q1FY19 and our estimate of Rs. 384556 Mn on YoY basis. Revenue growth was impacted by lower realizations across geographies with weakening economic activities and uncertainty around USChina trade conflict.

(mt) and 6.34 mt respectively. The company operating margins fell 290 bps to 15%. As a result operating profits decreased 15% to Rs 5376.90 crore. Cost of material consumed as a percentage of net sales (net of stock adjustment) increased 420 bps to 37.8%. Purchase of stock in trade was up 40 bps to 4.3%, Employee benefit expense fell 10 bps to 12.8% and other expenses decreased 140 bps to 31.1%. Other income decreased 29% to Rs 251.1 crore. Interest cost was up 9% to Rs 1806.43 crore....

fall in EBITDA at US$9mn (PLe:USD$125mn). Operational issues and sharp fall in spreads impacted TSE's earnings. Due to weak margins in TSE, we cut our EBITDA/EPS estimates for FY20E by 4%/18%. Despite sharp increase in iron ore prices, steel prices softened by US$20-25/t in last couple of months. In spite of serious trade restrictions imposed on its imports by various countries, China acted in a disciplined manner with reduced export intensity and stable domestic demand. On the contrary, RoW (ex-China), the so called disciplined and earnings focused markets witnessed...