1:10 Split, 1:2 Bonus, Rs 299/Sh Dividend: Tata's Steel Stock Nears Rs 170 Mark; Buy For Highest Rs 200 TP

Metal stocks have witnessed a frenzy of buying as two leading metals consumers US and China reported a surge in manufacturing activities. Tata Group-backed steelmaker Tata Steel which is the largest metal company in India in terms of market share, also witnessed a steller upside so much so it touched a new all-time high. Tata Steel's share rallied to almost hit the Rs 170 target. But there's more upside yet to come as metal stocks are expected to shine further!

On April 10th, Tata Steel's share price ended at Rs 165.15 apiece with a market cap of Rs 2,06,164.06 crore on BSE. During the trading hours of Wednesday, the stock touched an intraday high of Rs 169.20 apiece, which was near its 52-week high of Rs 169.75 apiece that was recorded this week as well.

Tata Steel's share price is slightly shy of the Rs 170 mark. If it touches anytime soon, or probably when the market opens on Friday, Tata Steel will be meeting the target prices set by JP Morgan and Fisdom of Rs 170. The next target will be Rs 177 set by Axis Securities, which is also likely possible soon.

But that is not all. Time is ripe to buy Tata Steel shares, for fetching double-digit returns in the near term. To be precise, there is a potential of over 21% upside in Tata Steel due to commodities like metals hitting new all-time highs globally. The highest target is now set by Jefferies to the tune of Rs 200 with a positive outlook.

Following the latest trend, Jefferies has maintained BUY on Tata Steel, while raising its target price to Rs 200 per share. The outlook is positive.

As per S&P Global, signs of improving wider economic conditions and market demand fed through to a further expansion of US manufacturing production in March, with the rate of expansion hitting a 22-month high. The rate of job creation also quickened, but new order growth softened. The US Manufacturing PMI surged to 50.3 in March 2024.

Similarly, Trading Economics data highlighted that the Caixin China General Manufacturing PMI increased to 51.1 in March 2024 from 50.9 in the previous month, beating market estimates of 51. It was the fifth straight month of growth in factory activity and the fastest pace since February 2023, boosted by higher new orders from domestic and abroad, with foreign sales rising the most in a year while output climbed the most since last May.

Apart from the external factors, domestic steel players have witnessed healthy Q4 productions. Tata Steel is one of them!

In Q4FY24, Tata Steel achieved the highest ever annual crude steel production of ~20.8 million tons, with a growth
of 4% YoY by debottlenecking across sites and achieving higher steel production at Neelachal Ispat Nigam
Limited. In 4QFY24, crude steel production was broadly stable and stood at around 5.38 million tons

Also, the company's India deliveries increased by 6% YoY and surpassed the previous best recorded in FY2023.
Domestic deliveries grew at a higher rate of 9% YoY leveraging India steel demand growth and our agile business model. In 4QFY24, deliveries grew by 11% QoQ and 5% YoY to 5.41 million tons and were the highest-ever quarterly deliveries.

Tata Steel Corporate Actions:

This Tata Group-backed player has a long history of rewarding investors.

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.

Dividend: It's not just a bonus, 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 of 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.

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.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.