Webinar :Register now for webinar on 'Trade BankNifty in just 15 minutes a day' - By Asmita Patel

Neutral Tata Steel; target of Rs 456: Motilal Oswal

Motilal Oswal recommended Neutral rating on Tata Steel with a target price of Rs 456 in its research report dated November 16, 2020.
Nov 19, 2020 / 02:58 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Motilal Oswal 's research report on Tata Steel


Tata Steel (TATA) has seen strong recovery in profitability, led by higher steel prices. Consolidated EBITDA rose 60% YoY to INR61.1b in 2QFY21 (the highest in the last six quarters), and we estimate 3QFY21 to be even stronger at INR71.6b (+98% YoY). Furthermore, net debt fell INR83b QoQ to INR988b (the lowest in the last six quarters), led by working capital release of INR103b. The potential divestment of the company’s profitable Netherlands operations to SSAB could lead to further deleveraging. However, its continually loss-making UK operations would remain an overhang on the stock. We raise our FY21/FY22E EBITDA estimates by 38%/9%, factoring in higher steel prices and spreads. Maintain Neutral.


Outlook


At CMP, the stock trades at 6.1x FY22E EV/EBITDA. Maintain Neutral, with TP of INR456/sh based on FY22E EV/EBITDA of 6x for Indian operations and 5x for Europe.


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.

Broker Research
first published: Nov 19, 2020 02:58 pm

stay updated

Get Daily News on your Browser
Sections