Moneycontrol PRO
Upcoming Webinar:Prashant Shah explains ‘Irrelevance of Bull & Bear Markets for Success in Technical Analysis’. Register For Free!

Neutral Tata Steel; target of Rs 1210: Motilal Oswal

Motilal Oswal recommended Neutral rating on Tata Steel with a target price of Rs 1210 in its research report dated June 23, 2021.

June 24, 2021 / 01:52 PM IST
  • bselive
  • nselive
Todays L/H

Motilal Oswal's research report on Tata Steel

Tata Steel (TATA)’s FY21 Annual Report highlights the ambition of the company to maintain leadership in volumes, cost, and sustainability. With improved cash flows, the focus is back on growing the India business, wherein it aims to double capacity to 35–40mt by 2030. However, it plans to tread cautiously on this path as debt repayment remains the focal point for the management. On Tata Steel Europe (TSE), the management palpably appears concerned about the tightening emission norms in Europe, rising carbon credit costs, and the resulting lower competitiveness against imports to Europe, which pose a key challenge in the longer term. While we expect deleveraging to continue on the back of higher prices, rising carbon costs and the burden of sustainability capex in TSE are key concerns, in our view. Thus, we assign a Neutral rating, with TP of INR1,210.


We arrive at our TP of INR1,210/sh on FY23E EV/EBITDA of 5x for its India operations and 4x for Europe. Our TP implies EV/capacity of USD902/t, a 30% premium to the past five-year average of USD700/t to factor in the benefit from likely deleveraging from the current upcycle. Given limited upside, we however rate it Neutral.

For all recommendations report, click here

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

Broker Research
first published: Jun 24, 2021 01:52 pm

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark