
Rising uncooked materials prices within the home market and weak point in Europe are seen as main draw back dangers for Tata Metal.
Shares of Tata Metal fell 2.5 p.c in commerce on January 3 after brokerage agency Kotak Institutional Equities downgraded the inventory to ‘cut back’ citing unfavourable danger reward on the present valuations.
On that account, the brokerage has additionally assigned a value goal of Rs 145 for the inventory which displays an upside potential of merely 3 p.c from the day prior to this’s closing degree.
At 12.54 pm, shares of Tata Metal had been buying and selling at Rs 136.60 on the Nationwide Inventory Trade.
Observe our market weblog to catch all of the reside motion
KIE famous the 20 p.c surge within the inventory value of Tata Metal prior to now two months, largely pushed by the broader market buoyancy, which has stretched its valuations past fundamentals, making the chance reward unfavourable.
The agency additionally highlighted the steelmaker’s deteriorating fundamentals on the margin entrance, which together with the spike in uncooked materials costs hints at a downward strain on the corporate’s spreads within the Indian market from 4QFY24.
Furthermore, the persistent strain in Europe’s metal spreads and the chance of delay in UK’s decision and completion of the KPO-II 5 mtpa growth are seen as different draw back dangers for Tata Metal based on the agency.
Although the growth of the KPO Part II plant in UK is prone to help the steelmaker’s earnings, the plant might face delays of 3-6 months from the sooner anticipation of commissioning by March. Because of this substantial volumes might solely come into impact from FY2026, taking away one other development lever for the corporate, the agency said.
Story continues beneath Commercial
Disclaimer: The views and funding suggestions expressed by funding specialists on Moneycontrol.com are their very own and never these of the web site or its administration. Moneycontrol.com advises customers to verify with licensed specialists earlier than taking any funding choices.