The shares of Tata Steel Limited declined by more than 5.5 percent and were trading at Rs 111 levels till the afternoon on Tuesday. The tata group stock fell after it reported a loss in the third quarter of FY23.
In Q3FY23, the company reported a total revenue of Rs 57,083.56 Crore which declined by 6 percent Year on Year from Rs 60,783.11 Crore. The decline was primarily driven by a drop in realizations across geographies. In the previous quarter, their revenue stood at Rs 59,877.52 Crore.
Tata Steel reported a consolidated net loss of Rs 2,501.95 crore for Q3 on account of declining revenue and higher expenses. It had posted a net profit of Rs 9,598.16 crore in the year-ago period and Rs 1,195.2 Crore in the previous quarter.
Tata Steel is among the top global steel companies with an annual crude steel capacity of 34 million tonnes per annum. It is one of the world’s most geographically diversified steel producers, with operations and commercial presence across the world.
The Tata group company has a market capitalization of Rs 1,35,566 Crore and a dividend yield of 4.60%. In addition to that, the stock has a TTM Price to Earnings (PE) ratio of 4.74 while the industry average is 5.79 and is thus undervalued compared to its peers.
Global brokerage firm Jefferies has a ‘Buy’ rating on the stock with a target price of Rs 150 per share, representing an upside of 35% from the current levels.
“Tata Steel’s Q3 reported EBITDA fell 33% QoQ and was 36% below JEFe, led by weak TSE (Europe) margins. Standalone EBITDA/t rose 10% QoQ, the first improvement after 5 quarters of decline,” the brokerage highlighted in its report.
Written by Anoushka Roy
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