Tata Steel gains 4% after March quarter nos; other metal stocks rally too

The company's margin improved on the back of stronger performance in the early part of the quarter.

Tata Steel shares climbed around 4 per cent on the BSE on Tuesday, a day after the company posted a consolidated pre-tax loss of Rs 1,499.45 crore for the quarter ended March 31, 2020. The company had logged a profit before tax (PBT) of Rs 4,252.50 crore in the corresponding period last year. 

The loss, the company said, was due to weak revenue and a slew of exceptional items, which further dented the earnings of the company.

At 09:22 am, the stock was trading around 3.4 per cent higher at Rs 332.10 as compared to a 0.52 per cent rise in the benchmark S&P BSE Sensex at 35,143.56 levels. 

Tata Steel shares had hit a 52-week high of Rs 514.75 on July 1, 2019 while its 52-week low stands at Rs 250.90, touched on March 30, 2020. The stock had hit an all-time high of Rs 924 on October 29, 2007, and its all-time low is Rs 37.56, hit on September 27, 2001. 

For the quarter under review, Tata Steel's top line stood at Rs 32,866 crore, down 20 per cent year-on-year (YoY) due to weak demand amid the slowing economic growth which impacted domestic as well as overseas operations. CLICK TO READ FULL REPORT
 

The company's margin, however, improved on the back of stronger performance in the early part of the quarter. Tata Steel Europe showed a turnaround in performance with positive Ebitda for the quarter, said T V Narendran, chief executive officer (CEO) and managing director (MD).

Motilal Oswal Financial Services (MOFSL) has maintained a "Neutral" rating on the stock with the target price of Rs 321 after the result announcement. The brokerage, however, notes that the consolidated earnings before interest, taxes, depreciation, and amortisation (EBITDA) was up 28 per cent sequentially, which was 15 per cent above its estimates of Rs 4,040 crore, led by improved performances from Europe and Tata Steel BSL.

CLSA, on the other hand, has an "outperform" rating on Tata Steel with the target price of Rs 365. The brokerage notes that Europe's profitability was better than expected. Additionally, the company's EBITDA beat its estimates by 12 per cent, it said. 

Besides Tata Steel, other metal stocks, too, were trading in the green. The S&P BSE Metal index was trading over 2 per cent higher at 7,364.76 levels. Among individual stocks, SAIL was up 5 per cent, Jindal Steel gained around 4.5 per cent.