Tata Steel Ltd. share price target

Consolidated revenue stood at Rs 361bn (+2%/+8% yoy/qoq) better than our estimate primarily due to better realization. Blended realization rises by 11%yoy supported by strong realization in Europe and SE Asia. Consolidated offtake declined 8%yoy to 6.2mt. EBITDA/tn of Indian business rises 17%yoy (supported by lower cost) while Europe and SE Asia declines 32%yoy and 27%yoy respectively primarily due to subdued offtake....

According to media reports, Tata Steel (TATA) has emerged as the top bidder in the recent IRP (Insolvency Resolution Professional)-administered auction of two steel assets, i.e., Bhushan Steel Ltd (BSL), the listed entity promoted by Neeraj Singhal, and Bhushan Power and Steel (BPS), the unlisted entity promoted by Sanjay Singhal. Although details of the deals are still sketchy, it appears that TATA will own a 74% stake in the debt-laden (though reduced to INR362b) BSL and an 88% stake in BPS (INR182b debt), with commitment to bring additional capital (not sure if equity or debt or preference share) toward working capital and pending capex. On consolidation, net debt will increase by INR544b (or more) at the end of FY20, assuming that additional capital requirement for working capital and capex will be met from internal accruals once the interest burden comes down on refinancing.

Q3 EBITDA/ton at Rs 14,000 was highest in past 12 quarters mainly on higher steel realization and benefits from operating leverage. Q3 was a strong beat to our and consensus estimates.

Tata steel consolidated net sales rose 21% to Rs 33446.6 crore in Q3FY18 compared to Q3FY17. The company operating margins rose 390 bps to 17%. %. As a result operating profits increased 57% to Rs 5696.94 crore. Cost of material consumed as a percentage of net sales (net of stock adjustment) increased 320 bps to 30.6%. Purchase of stock in trade was down 170...

Following the successful implementation of Phase-I of the 3 million tonne (MT) at Kalinganagar, Odisha, the board of directors of Tata Steel have approved Phase-II expansion at the facility. The company will expand Kalinganagar by 5 MT taking total capacity at the location to 8 MT in 48 months from the date of commencement of construction. The project configuration and costs includes investment in raw material capacity expansion, upstream and mid-stream facilities, infrastructure and downstream facilities including a cold rolling mill complex. The proposed...

Tata Steel's Q2FY18 consolidated EBITDA at Rs 47 bn (up 62% YoY) was lower than consensus and our estimates largely due to lower spread in the European business. Europe business EBITDA/ton declined to Rs 2,900 vs. Rs 5,210 in Q1FY18.

Tata Steel Ltd. reported a net profit for the second straight quarter aided by rise in global steel prices and higher sales volumes, but still fell short of market estimates. Tata steel consolidated quarterly revenues was up by 25% YoY to Rs. 32464 crore in Q2FY18. Operating profit was at Rs. 4720 crore with operating margin of 14.5%. Consolidated PAT recovered to Rs. 975 crore from a loss of Rs. 80 crore last year. Gross debt increased by Rs. 2447 crore and stood at Rs. 90259 crore mainly due to increase in working capital lines and forex impact. The capital expenditure for the quarter was around Rs. 1834 crore. Consolidated deliveries were up by 15%YoY and 11% QoQ to 6.45 million tonne. India...

We remain constructive, with an unchanged TP of Rs 818. Tata Steel numbers missed estimates, (Consolidated EBITDA: Rs 47.2bn, 53.7% YoY, -5.1% QoQ, Est Rs 54.6bn), driven by lower spreads in European operations (EBITDA/T: USD45, (33.1)/(44.3)% YoY/QoQ, Est USD81). Domestic numbers remained strong (EBITDA/T: Rs 10,959, 50.2/1.6% YoY/QoQ, Est: 11,547). Kalinganagar ops reached full ramp-up in 2QFY18, with BF/downstream utilisations at 100%/95% respectively.

ICICI Securities Ltd | Retail Equity Research Tata Steel reported muted Q2FY18 numbers. Tata Steel Europe's EBITDA/tonne came in lower than our estimates on account of lower realisations while the EBITDA/tonne of Indian operations came in lower on account of higher than expected operating costs The Indian operations reported sales volume of 3.1 million tonnes (MT) while European operations steel sales came in at 2.6 MT. The consolidated operating revenues came in at | 32464.1 crore (up 23.1%...

Tata Steel reported consolidated EBITDA of INR47.2bn in-line with JMfe. While Indian operations reported an EBITDA in line with estimates, European operations delivered an EBITDA of USD45/ton vs. JMFe of USD73/ton, driven by higher RM costs and lower spreads. Tata's Indian operations have now fully ramped up, with its 3mt green-field steel plant at Kalinganagar operating at close to full utilisation levels. A barrage of duties put in place by the Government has ensured a floor price for imports, limiting any downside to Indian operations profitability. We expect continued focus on the EU turnaround plans for much of the current fiscal year. We factor in Indian operations EBITDA/ton of INR11.3/11.5k for...