“Sequential improvement in profitability was primarily on account of better than expected profitability at the European operations aided by one-off revenues from land/emission sales and lower maintenance costs with blast furnace 5 at Port Talbot resuming operations,” analysts at Antique Stock Broking said in a result update and maintained ‘buy’ rating on the stock with 12 month target price of Rs 576 per share.
“Tata Steel is targeting a further deleveraging of $ 1 billion (approx. Rs 7,000 crore) at a gross debt level by end of FY20. Domestic steel demand is expected to maintain a steady growth rate post the conclusion of the general elections and gradually improving liquidity conditions. International prices have rebounded from lower levels and would be supported by firm input costs,” the brokerage firm said.
Analysts at JP Morgan were positive on Tata Steel given the strong rally in steel prices and the company’s raw material security.
"Exposure in the value-added business positions the company well for the steel cycle upturn in India. With iron ore prices surging, steel prices should follow suit and Tata Steel is well placed to benefit from the same," they said.
At 10:58 am, Tata Steel was up 6 per cent at Rs 542 on BSE, as compared to 0.20 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped nearly 3-fold with a combined 22 million shares changing hands on the BSE and NSE so far.