Tata Group-backed 116-year-old steel giant, Tata Steel will be in focus on May 29 due to trifecta. Firstly, the company will declare its Q4 results, secondly, it has planned to announce dividends for FY24. And thirdly, Tata Steel is also planning fundraising options. Accordingly, this metal stock will be trending. There is a potential upside of 24% in Tata Steel ahead.
Tata Steel Share Price:
The steelmaker's stock ended at Rs 174.85 apiece, down by 0.4% on BSE with a market cap of Rs 2,18,273 crore. The stock is near its 52-week high and low of Rs 178.00 apiece and Rs 105.65 apiece.
There is potential for up to 24% upside in Tata Steel. The highest target price is set by Arihant Capital to Rs 216, with a stop loss of Rs 160. In technical terms, Arihant's chart is showing signs of strength, while also its RSI movement is indicating positive momentum ahead.
Also, 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.
Currently, Tata Steel has outperformed the Nifty 50 index, while it has shown resilient performance over a year.
As per Axis Securities note, in the last 1 year, Tata Steel Ltd has beaten Nifty 50 by 38.21% (CAGR difference). Also, for 10 out of the Last 12 Months, i.e. 83% of the time it has beaten Index returns.
Tata Steel is also Axis Securities and Phillip Capital's top picks in the metal sector during Q4 earnings.
Tata Steel shares are in focus this week.
Tata Steel Dividend:
Tata Steel 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.
Among other corporate actions, 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.
Additionally, 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 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.
In Q4FY24, brokerage Phillip Capital expects Tata Steel's consolidated volumes to fall 1% sequentially. While on a quarter-on-quarter basis, the company is likely to witness lower standalone performance whereas Europe losses to come down meaningfully.
Meanwhile, on a standalone basis, Phillip Capital expects volume to rise 11% QoQ, domestic realizations to fall 3% QoQ, and standalone EBITDA to slip by 8% QoQ.
For Tata Steel Europe, the brokerage believes that the Europe business losses to narrow down substantially.
Furthermore, on a standalone basis, Kotak Institutional Equities said, "We estimate standalone steel realizations to decrease by 3% QoQ (+0.2% yoy) led by lower domestic prices during the quarter. We expect standalone volumes to increase by 5% yoy (+7.2% QoQ) to 5.2 mn tons. India EBITDA/ton to decrease by 15% QoQ (-15% yoy) to Rs 14,319/ton mainly led by lower realisations, partially offset by operating leverage."
Meanwhile, on a consolidated basis, Kotak's note said, "We estimate Europe to report EBITDA loss of US$104/ton (-US$178/ton in 3QFY24) led by improved realisations and operating leverage on a sequential basis."
Tata Steel NCDs:
Moreover, the company has announced that in the board meeting, Tata Steel will consider the issuance of unsecured Non-Convertible Debentures on a private placement basis.
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.
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