Shares of Tata Steel rallied as much as 6.6 per cent in the morning trade on Bombay Stock Exchange (BSE) despite posting a net loss of Rs 6,528.5 crore in the fourth quarter of previous fiscal.
Analysts said that stock has gained amid short covering and value buying at lower levels while the loss in Q4, which is mainly due to goodwill write-down of Rs 8,356 crore for Europe and Southeast Asia operations, was already factored in by markets.
The company said that a significant portion of this impairment charge of Rs 8,356 crore relates partly to the goodwill created on the acquisition of Corus Group in 2007 and partly to the assets of the business units that have been adversely affected by the severe contraction in demand, especially in the construction sector.
At 11:45 hours, shares of the company were trading at Rs 311.10 a piece, up 3.87 per cent from its previous close on BSE.
On standalone basis, Tata Steel reported a profit before tax of Rs 2,174 crore for the fourth quarter, compared with Rs 2,371 crore in January-March 2012.