Tata Steel Rallies Over 3% Post Q2 Results; Brokerages Raise Target Price

Tata Steel LtdBSE 4.58 % rallied as much as 3.1 per cent in morning trade on Thursday, after the country's largest steelmaker by market value, beat analyst estimates by a fair margin and in response most brokerages have raised their respective target prices.



Consolidated net profit for the July-September quarter stood at Rs 916.8 crore, against a loss of Rs 363.9 crore in the same quarter last year. Analysts were expecting a consolidated profit of Rs 400 crore, on sales of Rs 34,600 crore, according to a an ET Now poll. The company reported consolidated sales of Rs 36,644.8 crore.



At 09:30 a.m.; Tata Steel was trading 2.4 per cent higher at Rs 367.60. It has hit a low of Rs 359 and a high of Rs 370 in trade today.



Tata Steel, which is the country's largest steel maker, sold 6.48 million tonnes of saleable steel in the second quarter, from 6.07 million tonnes from last year, on a consolidated basis. It was majorly helped by Rs 180 crore from the company subsidiaries like Tata Sponge, Tata Steel Processing, Dhamra Port and Tata BlueScope.



Margins rose to 10% from 7% from last year, helped by price increases in India and South-East Asia, and sales growth overall. The company raised prices by 1,500-2,500 per tonne in September in India. It took a similar hike in October, which could aid margins in the December quarter as well, ET reported.



Brokerage firms like JPMorgan and Deutsche Bank maintained their 'overweight' and 'buy' ratings on the stocks and see it heading over Rs 500 in the next 12 months, which translates into an upside of over 46 per cent from Wednesday's closing price of Rs 358.85.



JPMorgan raised its target price from Rs 500 earlier to Rs 525 for the next 12-months. Deutsche Bank expects the stock to rally towards Rs 525, raising its target price from Rs 372 earlier.



This is the first quarterly results announcement under new managing director Narendran, who took the helm in September. The company expects second half to be better than the first half, driven by growth.

Source:- economictimes.indiatimes.com