Tata Steel shares: What's pulling the stock lower and what analysts suggest investors

Tata Steel shares were under pressure during Monday’s session. The Tata group company stock dropped more than 2 per cent to touch a day’s low level of Rs 104.8 per share on the BSE intraday.  

The decline was broad-based across metal space as the Nifty Metal Index was down nearly 2 per cent intraday. As per domestic brokerage Choice Broking analyst Deven Mehata, “Metal stocks could be in focus after China's central bank cut the CRR by 25 basis points to spur economic growth.” 

Besides Tata Steel, stocks that also contributed to the metal index and benchmarks fall were Hindalco, JSW Steel, Adani Enterprises, SAIL, NALCO, Jindal Steel, and Vedanta among others. 

A steep rise in the dollar index brought on by the sharp increase in interest rates in the US is the main factor behind the Nifty Metals Index's sharp correction from January highs, Santosh Meena, Head of Research, Swastika Investmart said in its comment on Metal’s fall today. 

Elara Capital’s analyst Ravi Sodah expects domestic steel demand to strengthen further given the ongoing busy construction season; increased government spending in the pre-election year and improved export offers should prop the volume of domestic steelmakers.  

Also Read: Govt plans to introduce production-linked incentive schemes 2.0 for specialty steel

Tata Steel share price history 

Tata Steel shares in the last one year have dipped by around 20 per cent as compared to flat BSE Sensex, while it has slumped nearly 12 per cent year-to-date against a six per cent fall in the benchmark index. 

Tata Steel share price target 

Jefferies sees the recent underperformance as a buying opportunity in Indian metals as it picks Tata Steel as the best bet. It gives a ‘buy’ call with a target of Rs 145 a share. The global brokerage upbeat on Indian steel players mainly in showing signs of recovery in China and improving Indian steel prices.

BoB Caps also maintained a ‘buy’ rating on the stock with a target price of Rs 140 per share, implying a 35 per cent upside in the stock price.  

The brokerage said Tata Steel is well positioned to weather the ongoing downturn and is advancing its plan for 1.5x capacity growth to reach 32 mt by FY27 with the implementation of Kalinganagar and Neelachal Ispat Nigam Limited (NINL) expansion. 

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