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Research
Company Update - Tata Steel - ICICI Direct
Posted On : 2021-12-14 19:52:52( TIMEZONE : IST )
- Over the last few days, Indian steel prices have witnessed a softening trend. Domestic HRC prices have declined from Rs. 67500/tonne as on November 30, 2021 to Rs. 65500/tonne on December 9, 2021. Along with steel prices, prices of key inputs such as coking coal have also witnessed a falling trend. During November 2021, coking coal prices (CNF India, Australia premium hard coking coal) were at ~US$318/tonne compared to ~US$403/tonne in October 2021, registering a decline of 21% MoM
- China recently cut its reserve requirement ratio by 50 bps to boost its economic growth. This cut in reserve requirement ratio for major commercial banks will be effective from December 15, 2021. This step to cut the ratio augurs well for Chinese steel demand, in general
- Chinese finished steel exports declined for a fifth consecutive month in November 2021, falling 3.1% MoM to 4.4 MT (a new monthly low for CY21). Monthly Chinese steel exports have declined from 6.5 million tonnes (MT) in June 2021 to 4.4 MT in November 2021
- Over the last six months, Tata Steel's net debt/equity has improved from 0.98x at the end of FY21 to 0.79x at the end of H1FY22. Similarly, Tata Steel's net debt/EBITDA has improved from 2.44x at the end of FY21 to 1.21x at the end of H1FY22
Key triggers for future price performance
- 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
- For FY22E, Tata Steel is targeting over US$2 billion gross debt reduction wherein it will prioritise offshore debt repayment
For details, click on the link below: Link to the report
Shares of Tata Steel Limited was last trading in BSE at Rs. 1166.95 as compared to the previous close of Rs. 1165.15. The total number of shares traded during the day was 197823 in over 8332 trades.
The stock hit an intraday high of Rs. 1178.20 and intraday low of 1148.00. The net turnover during the day was Rs. 230395708.00.
