Brokerages Raise Price Targets On Tata Steel Despite Weak Earnings

Shares of Tata Steel Ltd. gained as much as 5.1 percent to Rs 479.95, the biggest intraday jump since November, after the Indian steelmaker said it has struck a deal to solve its long-running U.K. pension standoff.

The resolution brings the Tata group company a step closer to a possible joint venture with Thyssenkrupp AG for its European operations.

While most brokerages maintained their rating on the stock despite the company reporting a surprise loss of Rs 1,168 crore in the January-March quarter, they revised their price target upwards on higher volume and margin guidance.

Here's what brokerages said about Tata Steel post earnings:

Antique Broking

• Rating: Hold
• Price Target: Rs 513 per share

• Domestic steel demand remains a cause of concern as volatile coking coal prices weigh on steel spreads in India and Europe.
• Tata Steel U.K. has offered to plough 550 million euros into its now-closed pension scheme. It will also give the fund a 33 percent stake in its U.K. business, which is likely to impact sentiment in the medium to short term.
• See Tata Steel’s domestic enterprise (EV) by its earnings before interest, taxes, depreciation and amortization (EBITDA) for FY19 at 7 times and at 6.5 times for its overseas subsidiaries.