Tata Steel share price jumps 1%

Tuesday saw a more than 1% increase in the price of Tata Steel shares on the BSE to Rs 974 per share as the company's consolidated EBITDA surprised analysts due to strong Tata Steel Europe (TSE) EBITDA. Long-term contracts and a more profitable product mix helped Tata Steel's European business achieve a sharp improvement in performance. Tata Steel reported a 21.03 percent year-over-year decline in consolidated net profit at Rs 7,714 crore in the first quarter, beating earnings street estimates, but at least two brokerage firms have lowered ratings on the stock.

Tata Steel's stock price has fallen 15.2% over the past year as a whole and 11% over the past six months. In the past year, the stock has fallen by more than 25%. For the same period a year prior, Tata Steel reported a net profit of Rs 9,768.34 crore. Total operating revenue for the company increased 18.64 percent to Rs 63,430.07 crore from Rs 53,465.43 crore in the same period last year. Ebitda for the entire company was Rs 15,047 billion.

While they wait for the EBITDA contraction cycle to complete, analysts kept their target price at Rs 827 per share with a "reduce" rating. The downcycle, they predicted, would peak in Q2FY22 and last for 4-5 quarters. The key focus areas for Tata Steel continue to be automotive, engineering, packaging, and construction, they continued. Steel demand has moderated as a result of supply-chain disruptions, primarily brought on by the Russia-Ukraine crisis and high inflation, they noted.