These veteran shares of Tata Group can cause damage! Profits more than doubled, yet the brokerage advised to cut it from the portfolio

Tata Group Stock: There is a good rally in the shares of Tata Steel today. In today’s trading, this stock reached a price of Rs 1215 with a strong rise on NSE. Whereas on Friday it closed at Rs 1176. In fact, on the weekend, the company released its results for the December quarter of the current financial year. The profit of the company has increased by about 159 percent year-on-year to Rs 9573 crore. However, it has decreased on a quarterly basis. After the results, some brokerage houses have advised to reduce or neutral in the stock. Brokerage says that profits have been better but conso EBITDA has come down. At the same time, the price trajectory is also downward, which may further impact EBITDA. However, some brokerage houses are also bullish on the stock.

EBITDA may be affected

Brokerage house ICICI Securities has advised to reduce the share of Tata Steel from the portfolio. The brokerage says that the company’s conso EBITDA in Q3FY22 has been better than expected at Rs 15900 crore. But the standalone EBITDA has decreased by Rs 2000/te on quarterly basis. However, Tata Steel Europe (TSE) has surprised and EBITDA has come down by only $ 30/te on a quarterly basis. On the other hand, EBITDA will be affected even further due to the down trend in higher cooking coal price and steel realization. Talking about net debt, it is made 63000 crores. It is likely to increase further in the future. The brokerage has set the target for the stock at Rs 1000. The brokerage believes that pressure can be seen for the next few quarters.

Due to this effect on consolidated business

Brokerage house Motilal Oswal has given a neutral rating on Tata Steel’s Chesar and has set a target of Rs 1235. The brokerage believes that there has been a 45 percent year-on-year growth in the Conso revenue and it is 60780 crores, which is better than the estimate. There has been an impact on the Kanso business. The brokerage says that the steel price is in a downward trajectory. In Australia, due to meteorological factors, the price of cooking coal is likely to rise, which will have a negative impact on Tata Steel’s EBITDA.

These brokerage houses are positive

On the other hand, brokerage house JP Morgan has given an overweight rating on the stock and has set a target of Rs 1850. According to the brokerage, the company has reduced the debt. At the same time, CLSA has also given a target of Rs 1820 giving investment advice. According to the brokerage, good profits have come from domestic business. But Europe’s profits have been affected.

(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)