The shares of Tata Steel Ltd have increased 45% after hitting a 52-week low of Rs 82.71 on June 23, 2022. The stock closed on a slightly negative end at the price of Rs. 119.65 (-0.66) after a gap-up opening of Rs. 121.40
The stock has rallied since its low despite the poor results it reported in the September quarter. For Q2 FY22, the company reported a consolidated total income of Rs. 59,877 which is a decrease of 5.60% compared to the Q1 FY22 income of Rs. 63,430.
The profits of the company had also witnessed a drastic decline from Rs. 7,554 in Q1 to Rs. 1,195 in Q2 of FY2022. Rising input costs is one reason for the decline in profits.
According to the recent reports by rating agency CRISIl, the Indian steel sector is anticipated to gain healthy traction as a result of supply chain changes.The report stated that the global steel prices are expected to stabilise in 2023 after dropping over 40% to USD 570-590 per tonne in December 2022 from the early-April peaks of USD 1,000 per tonne due to weak steel demand
This might be one of the factors on why there was an increase in the share price of Tata Steel.
Also, international stockbroker Jefferies recently upgraded the company’s hold recommendation to a buy with a target price of Rs 150. This is a potential upside of 23.55% from the current share price of Rs. 121.40
Written By Aaron Vas
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