CLSA, JPMorgan, Jefferies turn bullish on Tata Steel after strong Q4 performance – check target price here

rokerage firms have turned bullish on Tata Steel post its fourth-quarter result announcement. CLSA, JPMorgan, Jefferies and Investec have given Buy recommendations for the stock. The steel heavyweight beating the street’s expectations has reported a consolidated profit of Rs 6644 crores in the March-ended quarter of FY21. It posted a loss of Rs  1,481.3 crore in the year-ago quarter. 

Most businesses of Tata Steel performed better than estimates, Q1 standalone profitability likely to be even stronger, CLSA says. Adding further, the quarter four consolidated EBITDA at 11 per cent above estimate and debt reduction of the company remains strong. It has maintained a Buy stance with a target of Rs 1,150 per share.  

The dividend announced by Tata Steel of Rs 25 per share is at an all-time high, and H1FY22 should be very strong, JPMorgan says. It also maintains Buy stance with a target of Rs 1250 per share.  

Beating its estimate, Jefferies says rising steel prices drove sequentially higher EBITDA/t higher across businesses. It adds, Recurring net profit rose 95 per cent quarter-on-quarter basis and it’s 31 per cent above our estimates. It also maintains Buy stance with a target of Rs 1125 per share. 

On the other hand, Investec says, best lies ahead for Tata Steel and it is a preferred proxy play. It adds that the company’s operational beat across regions and strong CF generation aids balance sheet deleveraging. The brokerage firm maintaining a Buy stance sets a target of Rs 1175 per share. 

"The fourth quarter performance has stood out in terms of both earnings and cash flows, and helped the company to report one of the highest underlying performance for the full year in spite of the pandemic related disruptions during the first half of the financial year," said Koushik Chatterjee, Executive Director and CFO. 

The share price of Tata Steel jumped around five per cent during the early trade on Thursday, currently trading at almost day’s high level Rs 1122 per share intraday.