Shares of Tata Steel have experienced a four-day decline, culminating in a drop of ₹2 to ₹114.6 on NSE Today, following the company's disappointing financial performance in the second quarter. The steel giant reported a consolidated net loss of ₹6,511.2 crore for Q2, ending September 30, 2023, a stark contrast to the net profit of ₹1,297.1 crore reported in the same quarter of the previous year.
The company also saw a year-on-year decrease in total income, dropping to ₹55,910.2 crore from ₹60,206.78 crore (INR100 crore = approx. USD12 million). In light of these results, Zee Business advised selling Tata Steel futures with a stop loss at ₹118.
Despite the underperformance, Morgan Stanley (NYSE:MS) maintained its 'equal-weight' rating for Tata Steel and established a stock price target of ₹115. This represents a 1.4% discount from Wednesday's closing price. The firm acknowledged that Tata Steel's domestic EBITDA exceeded estimates but pointed out that its European operations continue to weigh down overall performance.
InvestingPro Insights
To further understand Tata Steel's current situation, let's delve into some real-time data and tips from InvestingPro. Tata Steel, despite its recent financial performance, is a prominent player in the Metals & Mining industry and has maintained dividend payments for 23 consecutive years. This long-term consistency in dividend payouts demonstrates a level of financial stability and commitment to shareholders.
Additionally, the company has been profitable over the last twelve months, and analysts predict it will continue to be profitable this year. This suggests that the recent quarterly loss may be a temporary setback rather than a long-term issue.
InvestingPro data also indicates that Tata Steel generally trades with low price volatility. This could be a positive sign for investors who prefer stability and are less inclined towards high-risk investments.
In total, InvestingPro offers nine valuable tips related to Tata Steel's performance and prospects. For more comprehensive insights, consider exploring InvestingPro's product that includes additional tips.
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