Brokerages Downgrade This Tata Group Stock After Disappointing Q2 Result, Suggest Sell

Leading global brokerage and investment group, CLSA has downgraded Tata Group stock, Tata Steel Ltd to sell with a target price of Rs 90 after its disappointing Q2 results. The brokerage has assigned sell rating to Tata Steel Ltd with a target price of Rs 90 apiece.

The current market price of Tata Steel is Rs 100 apiece. The stock has declined 23% in the last 1 year. CLSA said the profitability of Tata Steel declined both in India and Europe. It has also reduced the FY23-25CL EBITDA by 18% to 25% amid decline in profitability.

Meanwhile, Jefferies has also assigned sell rating to Tata Steel Ltd with target price of Rs 90 apiece. According to the brokerage, the price of steel may come down.
Check key takeaways below:

1. Tata Steel Ltd Stock Outlook

The current market price of Tata Steel Ltd is Rs 100 apiece with 52-week high at Rs 138 apiece and 52-week low at Rs 82 apiece, respectively. The stock has declined 1.23% in morning trade after posting disappointing Q2 Results. Currently, the stock is trading at a 27.54% discount from 52-week high level. It has a market capitalisation of Rs 1,22,483.90 crore as of writing the story.

2. Tata Steel Ltd Return

The stock has given a negative return of 27% in last 1-year and 8% in last 3-months. The stock has given a return of 150% in last 3-years and 41% in last 5-years.

3. Tata Steel Ltd Q2 Result

Tata Steel announced on Monday an approximate 90% decline in consolidated net profit to ₹1,297 crore for the July-September quarter of 2023-23, dragged by increased expenses. The company's net profit stood at ₹12,547.70 crore in the corresponding period of the previous financial year, Tata Steel stated in a
BSE filing.

Its total income during July-September 2022 stood at ₹60,206.78 crore as against ₹60,657.98 crore in the year-ago period. The firm's total expenses rose to ₹57,684.09 crore from ₹47,239.63 crore earlier, according to a PTI report.

4. Tata Steel About

Tata Steel was established in India as Asia's first integrated private steel company in 1907. With this, it also developed India's first industrial city at Jamshedpur.

Today, it is among the leading global steel companies. Its annual crude steel capacity across Indian operations is nearly 20 MnTPA and it registered a turnover of INR 91,037 crore in FY21. Tata Steel also set up its second greenfield steel plant of 3 MnTPA in the eastern state of Odisha in 2016; the expansion to 8 MnTPA in currently underway.

Disclaimer

The stock has been picked from the brokerage report of CLSA and Jefferies. Greynium Information Technologies, the Author, and the respective Brokerage Houses are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.