Tata Steel Ltd. share price target

Tata Steel (TSL) surprised on deleveraging and capital allocation while consolidated print (Rs158bn of adjusted consolidated EBITDA) was in line. Q4FY22 witnessed ~Rs140bn of FCF, taking net debt to Rs510bn, down ~Rs150bn. TSL has paid Rs51/share in dividend (yield of 4%).

We initiate coverage on Tata Steel with a BUY recommendation and a Target Price (TP) of Rs 1,700/share, implying an upside of 26% from the CMP. The stock is currently trading at 4.6x EV/EBITDA (consensus 1-Year forward) below its 10Y average of 6.3x.

The Russia Ukraine conflict has provided traction to global metal prices. During YTD CY22, a healthy rally has been witnessed in both ferrous and non-ferrous metals. During YTD CY22 (January 1-March 10, 2022), aluminium prices on the LME increased by ~21% to US$3409/tonne. On the ferrous front, during the above mentioned period, Chinese HRC export price increased by 13% YTDCY22 to US$855/tonne, domestic HRC price have increased by 9% YTDCY22 to | 69500/tonne and domestic CRC prices increased 16% YTDCY22 to | 80500/tonne. Going forward, we believe supply fears on the back of current geopolitical scenario...

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

TATA steel (TATA) reported Q3FY22 EBITDA in line with our estimates at Rs158.9bn (down 3.4% QoQ). While it came above consensus estimates (CE) by 4%. India operation's EBITDA came above our estimates by 5% while Tata steel Europe (TSE) missed our expectation by 20% due to higher energy cost. Recent relaxation of monetary policy for real-estate sector and front loading of infrastructure spending reflects visible pressure on Chinese authorities to stimulate economic activity after registering meaningful slowdown over last two quarters. While, concerns on oversupply resulting from contraction in...

Tata Steel reported strong result on a standalone basis. Europe, however, disappointed due to a surge in energy and coal costs. Consolidated EBITDA was 66% higher on a YoY basis, but 3% lower sequentially. Standalone EBITDA/t at INR28,631 (up 43% YoY) was 12% above to our estimates. However, Tata Steel Europe (TSE)'s EBITDA/t at USD182 was 18% lower than our estimate. The 4QFY22 trajectory for TSE, albeit, is better due to falling iron ore and renegotiated contractual steel prices offsetting the higher coal costs. Consequently, we raise our TP for...

Tata Steel Long Products (TSLP) has acquired the government's 93.71% stake in Neelachal Ispat Nigam (NINL) for INR121b. The deal implies an EV of INR129b (at 100% stake) for the 100mt iron ore mine and the land parcel of 2,500 acres. As the NINL plant is a short distance away from Tata Steel's Kalinganagar plant, the two plants will have a certain level of operational synergies. The plan going forward: The management plans to set up a greenfield long steel products plant of 4.5mt capacity on NINL's land. This implies...

Chinese finished steel exports declined for a fifth consecutive month in November 2021, falling 3.1% MoM to 4.4 MT (a new monthly low for CY21). Monthly Chinese steel exports have declined from 6.5 million tonnes (MT)...