Buy Before Q4, Highest TP Over Rs 210; Lakhpati Stock, Tata’s Steel Up 16% YTD; 1:10 Split, Rs 299/Sh Dividend

Despite having among the best performances on the metal index, the steel behemoth Tata Steel, backed by the Tata Group and with a market capitalization of over Rs 2 lakh crore, has been defying the goal set by its main brokerages to reach the Rs 170 level. Tata Steel’s technical indicators are generally stable and suggest optimistic trends; nevertheless, this heavy metal stock is still a little bit off from its pivot point, which is located between Rs. 160.67 and Rs. 157.47 for support and Rs. 163.87 to Rs. 167.07 for resistance.

Given that Tata Steel is a top selection of Axis Securities for the industry ahead of the company’s Q4 earnings release, there’s a good chance the stock will have a profitable bull run during its Q4 results announcement.

Tata Steel has a market valuation of Rs 2,02,357.98 crore and is trading at Rs 162.10 a share on the NSE. Tata Steel has been trading nearer to Rs 169.80 a share, the 52-week high. Based on exchange statistics, its price-to-equity ratio is 49.29%.

Tata Steel had a more general uptrend last week, which is related to the company’s announcement on the purchase of Angul Energy. On April 19, it was revealed that the Tata Steel and Angul merger plan had been authorized by the NCLT Bench in Delhi. Angul will then merge with Tata Steel in the future. The merger is an exchange of shares.

Tata Steel’s stock price has surged 16% on the BSE year-to-date.

It is quite probable that Tata Steel will declare its Q4 profits in May. Additionally, investors will search for dividend payments.

Strong production and delivery have come from Tata Steel. By debottling across sites and increasing steel output at Neelachal Ispat Nigam Limited, it has reached the highest-ever annual crude steel production of around 20.8 million tons, with a gain of 4% YoY. The output of crude steel remained relatively consistent in 4QFY24, totaling around 5.38 million tons.

One of the best metal stocks for dividend payments, Tata Steel has previously experienced stock splits and bonus shares.

The firm paid a dividend of Rs 3.60 per share in 2023. However, the most dividend payment it made per share was Rs 51 in 2022, the year its shares split. Tata Steel paid the highest dividends, at Rs 63.75 per share, in 2022 alone. Tata Steel is now one of the top-yielding companies in the metals industry with a dividend yield of 2.18%. However, since its first bonus offering in August 2004, Tata Steel has given investors payments of up to 299.35 per share.

Regarding the bonus issue, the corporation has distributed bonus shares in a 1:1 ratio, with an August 2004 record date.

Tata Steel only separated once in its post-pandemic history, and that was in 2022. A ratio of 1:10 resulted from the division of the company’s one equity share, which had a face value of Rs 10 per share, into ten smaller shares, each with a face value of Rs 1.

Tata Steel shares have made a staggering 2,232.37% in all-time profits after accounting for stock splits, bonus shares, and dividends. This makes the stock a lakhpati-making opportunity. On January 1, 1999, the share price of Tata Steel was Rs 6.95.

A shareholder’s corpus now exceeds Rs 23.32 lakh if they purchased Tata Steel shares 25 years ago for Rs 1 lakh. During this time, they received returns of almost Rs 22.32 lakh on their Rs 1 lakh investment.

Brokerages who have a BUY or accumulate view on Tata Steel, such as Fisdom, Jefferies, and Prabhudas Lilladher, have set a target price of Rs 170. Prabhudas, on the other hand, has a greater goal of Rs 184 levels.

Meanwhile, StoxBox has predicted that if Tata Steel breaks out of its Rs 170 zone, the next significant possible objective is the Rs 200 level, with the underlying bias continuing to be bullish. However, the brokerage anticipates more selling pressure if the stock drops below Rs 160.

Additionally, a previous analysis from LKP Securities suggested that Tata Steel’s RSI had produced a buy crossing, adding to the optimistic undertone. The firm has assigned a target price of Rs 200.

Tata Steel, however, is more than that. Tata Steel’s breakout pattern indicates a target of Rs 214, the maximum price that brokerages have set for this Tata Steel stock, according to a Progressive Shares analyst.

“We anticipate Tata Steel India’s EBITDA/t to decline by 9%/15% YoY/QoQ, primarily due to lower realizations and higher coking coal consumption costs, partially offset by increased operating leverage,” Axis Securities said, maintaining Tata Steel as one of its top selections in the metal index. We anticipate that Europe’s EBITDA/t loss would decrease to $112/t from $178/t in Q3FY24 due to increased sales volume and better realizations, especially in the UK.”

Additionally, according to the Axis Securities research, “Tata Steel India’s sales volume increased to 5.41MT from 0.53MT QoQ, indicating a strong quarter for the company.” Sales volume in Europe increased by 0.15MT QoQ to 2.09MT, driven by the resumption of BF6 in the Netherlands after relining was completed in early February 24 and better-than-expected sales in the UK in the third quarter of FY24. The total sales volume rose to 7.82 million, a 0.75 million QoQ rise.

The report from Axis said, “Tata Steel India had a seasonally good quarter as seen by its sales volume, which climbed by 0.53MT QoQ to 5.41MT. Sales volume in Europe increased by 0.15MT QoQ to 2.09MT, driven by the resumption of BF6 in the Netherlands after relining was completed in early February 24 and better-than-expected sales in the UK in the third quarter of FY24. The total sales volume rose to 7.82 million, a 0.75 million QoQ rise.

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