Tata Steel Share Price NSE & BSE, Stock Analysis & Future

Share prices for JSW Steel and Tata Steel Share Price have dropped as a consequence of weaker demand for steel both domestically and in China. The Street has been apprehensive about steel companies as a result. Global steel prices, which skyrocketed as a result of the Russia-Ukraine war, have been declining. Following a month in which major steel producers JSW Steel, Tata Steel, and Jindal Steel provided investors with profits ranging from 7 to 16 percent, their shares were under pressure on Monday.

Tata Steel Share Price 

Following the CS report, intraday trading in JSW Steel shares decreased 2.6 percent, reaching an intraday low of Rs 646.65 on the BSE at 1:45 pm. In comparison to the benchmark Sensex, which has grown more than 12 percent over the last month, the stock, which has dropped more than 3 percent over the last five days, has improved investors’ wealth by 12 percent.

Tata Steel Share Price fell 3.4% during the day. The stock was down 3.18 percent from its previous close at 1:45 p.m. on BSE, trading at Rs 106.50. The stock has given investors gains of more than 15% during the last month. In contrast, shares of Jindal Steel decreased by about 4% today, closing at Rs 390. Despite the stock losing lustre over the past five sessions, it has increased investors’ wealth by 10% over the past month. 

The Street has been wary of steel stock investments since global steel prices, which skyrocketed as a result of the Russia-Ukraine conflict, have been declining due to a decline in both local and international steel demand. The durability of local steel prices, in the opinion of global brokerage Credit Suisse, is unlikely to last.

How Steel Stocks Are Doing Right Now Compared To A Month Ago?

In its most recent analysis, Credit Suisse stated that it continues to be apprehensive about the Indian steel industry, which coincides with the recent decline in steel equities. The firm stated that future spreads are probably going to revert to the historical norm and that it believes poor China real estate poses a danger to regional pricing.

In contrast to Tata Steel, which it rates as neutral, CS has maintained its underperform rating on JSW Steel’s shares.

Considering the decline in pricing and increase in local supply, major steel producers have pushed the government to lower or eliminate the export levy on steel goods. To increase the availability of the alloy on the domestic market, the Center had imposed a 15% charge on major steel products in May. However, it had reduced the import duty on important raw materials for the industry.

An ICICI Securities research claims that although the implementation of export levies on petroleum, iron, and steel goods was a step backwards (creating doubt about tax policy and undermining trust in export markets), it is having the desired impact of lowering domestic costs.

Tata Steel Share Price

TATA Steel Export Growth

Export growth, however, abruptly slowed to 2.1 percent year-over-year (YoY) in July, as steel and steel-product exports fell 37.5 percent in the previous month (and – 7.9 percent YoY in Apr-Jul), according to the brokerage. Engineering goods exports, the largest export category, also experienced a 2.1 percent YoY decline in July (and a modest 8.1 percent YoY increase in Apr-Jul 22).

From their top of Rs 63,100 per tonne in April of this year, steel futures prices fell 18% to Rs 51,630 at 1:25 PM today.

When it comes to steel stocks, Vinit Bolinjkar, Head of Research at Ventura Securities, favours Kirloskar Ferrous (5.3x FY25 EV/EBITDA), as the company just purchased the metal tubes producer ISMT and plans to turn the business around. Additionally, he noted, it has implemented a number of cost-saving initiatives, such as the construction of a waste heat recovery system (WHRS) and a railway line.

Given the anticipated slowdown in important markets like the US and China, Bolinjkar said it was impossible to predict how long steel prices would decline and that his business is currently bearish on the pricing.

TATA Steel Net Profits

Bolinjkar thinks real estate and car stocks would profit from the decline in raw material costs and, as a result, the firms’ gross margins may increase, even if steel stocks were in the negative.

The Nifty 50 Index’s net profits, according to Jatin Damania, Vice President of Fundamental Research at Kotak Securities Ltd, will decline by a significant 41 percent in the 2022–2023 fiscal year due to a sharp decline in global metal prices on weak demand and a sharp decline in domestic steel profitability as a result of export duties.

He pointed out that two steel stocks and one aluminium stock are included in the Nifty 50 Index, and his company predicts a dramatic decrease in the profitability of steel businesses following the introduction of export taxes. According to him, JSW Steel and SAI have “sell” ratings from Kotak Securities, while Tata Steel, Jindal Steel and Power, and NMDC have “reduce” ratings.

Official Website Click Here
Homepage upsacs.in

Leave a Comment