16 Aug , 2021 By : Kanchan Joshi
Metal stocks have been gaining momentum amid rally in steel prices along with rise in demand and improved outlook for the sector. Nifty Metal index was trading over 2% higher in Monday's afternoon deals, surging to record high level with Tata Steel, Vedanta, JSW Steel, Hindustan Zinc, Hindalco supporting the index.
India's largest steelmaker Tata Steel has reaped the benefits of the same as the steelmaker's share price has surged by ~3.5x over the last 12 months, from around Rs413 in August 2020 to Rs1,461 levels in August 2021. The steel giant is among the top global steel companies with an annual steel production capacity of ~34 million tonnes per annum (MTPA). It is one of the world’s most geographically diversified steel producers, with operations and commercial presence across the world.
Tata Steel reported a steady performance for Q1FY22. It reported its highest-ever consolidated net profit of Rs9,768 crore for the quarter ended 30 June, compared with a net loss of Rs4,648 crore in the year-ago quarter. The consolidated topline for the quarter was at Rs53,372 crore (up 110% YoY, 7% QoQ), broadly in line with ICICI Securities' estimate.
Tata Steel is aiming to double Indian operations steel production capacity to 40 million tonnes (MT) by 2030. The doubling of domestic production capacity would be done through both organic as well as inorganic route. "India’s share in Tata Steel’s overall consolidated production capacity has risen from 29% in 2010 to 57% in 2020 and is likely to reach 73% by 2030,'' ICICI Direct said in a note.
For FY22E, Tata Steel is targeting over $2 billion gross debt reduction wherein it will prioritise offshore debt repayment. The brokerage has a ‘Buy’ rating on the stock with a target price of Rs1,750 per share (target period: 12 months).
In its ferrous metal sector coverage, ICICI also likes JSW Steel. JSW Steel is one of the leading integrated steel companies in India, which has a strategic collaboration with global leader JFE Steel of Japan. The brokerage has a Buy on the stock with a target price of Rs850 apiece.
2 Comment
Gopal 2021-08-17
Supply chain disturbed, all companies making huge huge profits, common man effected, All indegeinous products why prices double, cement is increased by 60% reason ,carteled
Like(0) Dislike(0)Raj Misrhra892021-08-17
Gopal ji .. it's called healthy inflammation... India has now to stand out .. 5 Trillion aise hi nahi banegi
Like(0) Dislike(0)