CARE has upgraded long term credit rating on the company to AA+ from AA and the outlook to stable from negative. Brokerage firm ICICI Direct has a buy call on the stock with target of Rs 1,500 per share.
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Tata Steel stock price added over 2 percent intraday on July 9 as CARE upgraded the rating on the company. The stock has surged over 260 percent in last 1 year.
At 10 am, it was trading at Rs 1,216.00, up Rs 26.25, or 2.21 percent. It touched an intraday high of Rs 1,217.30 and an intraday low of Rs 1,188.05.
CARE has upgraded long-term credit rating on the company to AA+ from AA and the outlook to stable from negative.
“The revision in rating and outlook assigned to the instruments of Tata Steel factors in the improvement in performance witnessed during FY21, sequentially from Q2-FY21 onwards, particularly in Indian operations, on the back of revival in demand and increased steel prices leading to substantial cash flow generation and sizeable deleveraging at the end of FY21 resulting in improvement in debt coverage indicators,” according to an exchange filing.
The rating continues to factor in the established track record of Tata Steel as one of India’s largest integrated steel manufacturing company with enriching product-mix having significant captive raw material security and global presence aided by geographically diversified production facilities. Furthermore, the company also enjoys immense financial flexibility by its virtue of being part of the Tata Group of Companies,” it said.
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CARE has withdrawn ratings assigned to the bank facilities, perpetual bonds and Non-Convertible Debentures, as they have been fully repaid and CARE has received the ‘No Dues Certificates’ of the same.
Vidnyan Sawant, AVP, Technical Research at GEPL Capital suggests buying the stock with target of Rs 1,452 per share. “The stock has been giving a consolidation breakout with volumes for the last seven weeks. On the daily charts, the stock has been continuously sustaining above its 20-day SMA and it is giving ascending triangle pattern breakout which indicates the strong positive sentiment in the stock for the short to medium term as well,” he said.
Research and broking firm ICICI Direct has a buy on the stock with target of Rs 1,500 per share. Tata Steel laid out its strategic Roadmap 2030. It is aiming to double Indian operations steel production capacity to 40 million tonnes (MT) by 2030. The company would focus on organic growth for the flat product segment and would participate in inorganic opportunities for the long product segment.
India’s share in the company’s overall consolidated production capacity has increased to 57 percent in 2020 from 29 percent in 2010. The country’s share is further likely to increase to 73 percent by 2030, it said.
The steel major posted an over 43 percent jump in its consolidated crude steel output at 7.94 million tonne (MT) during the quarter ended June 30, 2021. The company’s consolidated output of steel in the year-ago quarter was at 5.53 MT, Tata Steel said.
During the April-June period of 2021-22 fiscal, the company’s consolidated sales also rose to 7.14 MT, from 5.33 MT in the same quarter a year ago, a rise of 35 percent.
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