Webinar :Register now for webinar on 'Trade BankNifty in just 15 minutes a day' - By Asmita Patel
you are here: HomeNewsBusiness
Last Updated : Nov 20, 2020 11:50 AM IST | Source: Moneycontrol.com

Buy Tata Steel; target of Rs 625: ICICI Direct

ICICI Direct is bullish on Tata Steel recommended buy rating on the stock with a target price of Rs 625 in its research report dated November 17, 2020.

Broker Research
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

ICICI Direct's research report on Tata Steel


Tata Steel’s Q2FY21 consolidated performance was better than our estimates on all fronts. For Q2FY21, sales volume for Indian operations were at 5.05 MT (up 72% QoQ, 22% YoY) while sales volume from European operations were at 2.27 MT (down 1% YoY, up 15% QoQ). Consolidated topline came in at Rs 37154 crore (up 7% YoY, 53% QoQ), higher than our estimate of Rs 34768 crore. Consolidated EBITDA was at Rs 6111 crore while adjusted EBITDA was at Rs 5425 crore, (our estimate: Rs 4495 crore). Standalone operations reported EBITDA/tonne of Rs12861/tonne (our estimate: Rs 12000/tonne) while European operations reported negative EBITDA/tonne of US$27/tonne (our estimate of negative EBITDA/tonne of US$35/tonne). PAT from continuing operations was at Rs 1635 crore.


Outlook


On the back of increase in realisations, we expect a healthy H2FY21 for the company. We model consolidated EBITDA margin of 12.9% for FY21E and 15.6% for FY22E (H1FY21 consolidated EBITDA margin was 10.8%). The debt repayment drive also augurs well. We value the stock on SoTP basis and arrive at a target price of Rs 625. We upgrade the stock from HOLD to BUY recommendation.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Published on Nov 20, 2020 11:50 am
Sections