Tata Group shares rally; Tinplate, Tata Sponge, Tata Metaliks up over 10%

Shares of Tata Group companies were trading higher by up to 18% on back of heavy volumes in otherwise range-bound market on Wednesday.

Tinplate Company of India, Tata Sponge Iron, Tata Metaliks and Tayo Rolls were up in the range of 10% to 18%, while Nelco, Tata Investment Corporation, Oriental Hotels, Tata Elxsi, Tata Consultancy Services (TCS), TRF and Trent up between 2% and 6%. On comparison, the S&P BSE Sensex was down marginally 0.01% at 34,438 points at 03:03 PM.

Five stocks – Oriental Hotels, Tata Investment Corporation, Tata Metaliks, Tata Sponge Iron and Tinplate Company of India– have hit their respective all-time highs on BSE in intra-day trade today.

Tinplate Company of India, Tata Metaliks and Tata Sponge Iron, all three are engaged in iron & steel and intermediate products business.

The rating agency ICRA in last week has reaffirmed the long-term rating of proposed term loan, fund-based limits and short-term ratings of Tata Sponge Iron with stable outlook.

“The reaffirmation of the ratings takes into account Tata Sponge Iron’s highly conservative capital structure, its strong debt-protection metrics and a comfortable liquidity position, given a  large  cash balance and liquid investment portfolio, which impart a high degree of financial flexibility to the company,” ICRA said in a release.

ICRA also notes the improving demand scenario for sponge iron in the country, which has resulted in an increase in sponge iron realisation in the current year, thereby improving the operating profits of the company.

ICRA believes that the outlook for Tata Sponge Iron will continue to remain stable. The  outlook  may  be  revised  to  'Positive'  if  substantial  growth  in  revenue  and  profitability  strengthens  the  financial  risk profile of  the  company.  The  outlook  may  be  revised  to  'Negative'  if  the sponge-iron  industry  goes  into  a  downturn, adversely impacting profits and cash flows significantly.

TCS was up 3% to Rs 2,792 ahead of October-December quarter (Q3FY18) earnings on Thursday, January 11, 2018. The trading close to its all-time high of Rs 2,834 touched on October 7, 2014 on BSE in intra-day trade.

TCS growth has likely bottomed out after slowing for three consecutive years. Stable leadership, early leads into a number of high-growth areas and scale in multiple markets keeps TCS the strongest prospect for long-term growth, analyst at CLSA said in IT services sector outlook.

TCS had a strong recovery in calendar year 2017 (CY17) with around 18% total return including its buyback, dividend and stock performance. We expect another solid year in CY18, it added.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
TINPLATE CO.	311.80	268.15	16.3
TATA SPONGE IRON	1198.50	1070.15	12.0
TATA METALIKS	951.00	853.65	11.4
TAYO ROLLS	90.65	82.45	10.0
NELCO	142.75	134.75	5.9
TATA INV.CORPN.	933.00	886.75	5.2
ORIENTAL HOTELS	52.10	50.30	3.6
TCS	2803.60	2708.45	3.5
TATA ELXSI	1038.95	1004.10	3.5
TRF	283.95	275.75	3.0
TRENT	345.50	340.25	1.5