Tata Group-backed steelmaker, Tata Steel will be in focus in the trading week from May 27th to 31st as the leading metal company will announce its Q4 results and dividend rewards for FY24. In the fourth quarter, Tata Steel's India operating profit is likely to decline, while sales volume may see an upside. Among other key positives is expected that the company's EBITDA loss may narrow in Europe business. Tata Steel is currently near Rs 175 levels after touching a new 52-week high of Rs 177.55 apiece last week on Friday.
Tata Steel Share Price:
Last week, on May 24, Tata Steel's shares ended at Rs 177.55 apiece, broadly flat compared to the previous session on BSE. The company's market cap is around Rs 2,18,210.58 crore. In the trading hours of May 24, Tata Steel however touched a new 52-week high of Rs 177.55 apiece. Accordingly, Tata Steel ended last week with gains of 4.4%.
YTD, the stock is still up by 25% on BSE. In a year, Tata Steel rallied by 64% on the exchange.
Apart from declaring the date of Q4 results and dividend, Tata Steel also received a boost after the NCLT Kolkata bench approved the scheme of amalgamation between the company and The Indian Steel & Wire Products. The scheme now awaits approval from NCLT Mumbai.
Tata Steel Q4 Results:
As per the regulatory filing, Tata Steel informed that the meeting of the board of directors is scheduled on May 29, 2024, to consider and approve and take on record the audited Standalone and unaudited Consolidated financial statements and results for the quarter ended March 31, 2024, to consider and take on record the audited Standalone and Consolidated financial statements and results for the financial year ended March 31, 2024.
For Q4FY24, on Tata Steel, Axis Securities said, "India sales volume grew by 0.53MT QoQ in a seasonally strong quarter. Europe sales volume grew by 0.15MT QoQ led by the restart of BF6 at the Netherlands upon completion of relining in early February along with improvement in sales at the UK over the impacted base of seasonally weak Q3FY24. Consolidated Sales volume grew by 0.75MT QoQ."
Further, Axis Securities added, "The Steel HRC prices (traders' market ex-Mumbai) have declined by 7%/5% YoY/QoQ. Consolidated revenue is expected to grow by 7% QoQ mainly led by higher consolidated sales volume."
Additionally, the brokerage highlighted that EBITDA is expected to increase by 6% QoQ led by higher operating leverage on higher sales volume. On a YoY basis, EBITDA is expected to decline led by lower realizations.
However, Axis Securities also said that India's EBITDA per tonne is expected to decrease by 15% QoQ (-9% YoY), mainly led by lower realizations and higher coking coal consumption costs, partially offset by operating leverage. The EBITDA per tonne loss in Europe is expected to narrow down to $112/t in Q4FY24 from $178/t in Q3FY24, led by higher sales volume in Europe and higher realizations in the UK.
Tata Steel remains Axis Securities' top pick in the metal sector.
Tata Steel Dividend:
Tata Steel also informed that on May 29 the board will recommend dividend, if any, for the financial year ended March 31, 2024.
Notably, Tata Steel has a strong and consistent track record of paying hefty dividends to its investors. Since its first bonus issue year, Tata Steel has delivered a whopping Rs 299.35 per share to its investors as a dividend to date. In 2023, the company paid a dividend of Rs 3.60 per share. But its highest dividend payout is Rs 51 per share in 2022, the time its share split. In 2022 alone, Tata Steel paid the most dividends of Rs 63.75 per share. Currently, Tata Steel has a dividend yield of 2.18%, also among the top-yielding stocks in the metal sector.
Tata Steel Share BUY OR SELL?
Currently, ICICI Securities is very bullish on Tata Steel's share price. The brokerage has upgraded its stance from ADD to BUY, while the target price is set at Rs 200.
Furthermore, brokerage Progressive Shares believes that Tata Steel's breakout pattern signals a target of Rs 214, which is the highest target on this stock.
Tata Steel Other Corporate Actions:
Bonus Issue: Tata Steel has issued 1 bonus share to its investors in the past. It was in August 2004, that the turned ex-bonus for a bonus ratio of 1:1. Hence, the company paid 1 additional share as a bonus on every existing 1 share held by investors.
Stock Split: Tata Steel has turned ex-split only once and it was in 2022. The company's 1 equity share having a face value of Rs 10 each was split into ten smaller shares having a face value of Rs 1 each, hence a ratio of 1:10.
Tata Steel Group is among the top global steel companies with an annual crude steel capacity of 35 million tonnes per annum.
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