Motilal Oswal neutral on Tata Steel; target price: Rs 110

Motilal Oswal has neutral call on Tata Steel with a target price of Rs 110. The current market price of Tata Steel is Rs 105.95.

Tata Steel, incorporated in the year 1907, is a Large Cap company (having a market cap of Rs 130546.48 Crore) operating in Metals - Ferrous sector.

Tata Steel key Products/Revenue Segments include Steel & Steel Products, Power, Other Operating Revenue and Others for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 63131.08 Crore, up 10.07 % from last quarter Total Income of Rs 57354.16 Crore and down -9.31 % from last year same quarter Total Income of Rs 69615.70 Crore. Company has reported net profit after tax of Rs 1469.99 Crore in latest quarter.

The company’s top management includes Mr.Ratan N Tata, Mr.David W Crane, Ms.Mallika Srinivasan, Mr.O P Bhatt, Mr.Deepak Kapoor, Mr.Farida Khambata, Mr.Saurabh Agrawal, Mr.V K Sharma, Mr.Koushik Chatterjee, Mr.T V Narendran, Mr.N Chandrasekaran, Mr.Noel Naval Tata. Company has Price Waterhouse & Co Chartered Accountants LLP as its auditors. As on 31-12-2022, the company has a total of 1,222 Crore shares outstanding.

Investment Rationale
Domestic steel prices which move in tandem with international steel prices have corrected over the last few weeks; however, the demand for steel is expected to improve before the onset of monsoon season.
The brokerage also expects steel volumes to pick up in FY24 amid increased government spending before the elections next year. While TATA is well placed, the stock trades at 5.5x FY24E EV/EBITDA and Motilal Oswal believes it is fully priced in at current levels.

Promoter/FII Holdings
Promoters held 33.9 per cent stake in the company as of 31-Dec-2022, while FIIs owned 21.87 per cent, DIIs 19.55 per cent.