Tata steel shares: Should you buy, sell or hold after stock split

Tata Steel shares are going to trade ex-split on Friday as board of directors of the company has fixed record date for Tata Steel share split on 1st August 2022. The Tata group company has announced Tata Steel stock split in 10:1 ratio. Ahead of trading ex-split, Tata Steel share price today opened upside and went on to hit intraday high of ₹100.35 apiece levels on NSE, logging near 4 per cent rise in early morning deals on Thursday.

According to stock market experts, Tata Steel would continue to reap the benefit of better demand in the domestic market due to revival in the auto sector but much will depend upon the steel price revival in the European markets. If the steel price fails to rebound inn the European merchandise, then in that case commodity stock may come under pressure due to the pressure on its margins.

Advising positional investors to maintain buy on dips strategy in regard to Tata Steel shares, Sumeet Bagadia, Executive Director at Choice Broking said, "Stock market investors can maintain buy on dips strategy in this steel stock for around 25 per cent to 40 per cent upside in next 3 to 5 months." 

The Choice Broking analyst went on to add that traders can take position in the counter maintaining stop loss at ₹90 for ₹115 target whereas positional investors can buy the counter and keep on adding on dips maintaining stop loss at ₹85 apiece levels. Tata Steel stock may go up to ₹125 apiece levels in next 3 months.

Speaking on Tata Steel share price outlook, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Despite steep decline in steel prices in the European and other international markets, Tata Steel has managed to deliver better Q1 numbers. This is because of the improving sentiment in the auto sector. It is expected to fuel demand for the company in domestic markets in next 2 to 3 years. However, its margins may have to face pressure in upcoming quarters if the steel prices doesn't rebound in European and other markets like China and the US."

“Tata Steel Ltd. has started trading EX Split starting from today. We have a neutral view on the company from a short to medium-term perspective as the normalization of profitability has commenced due to the steel prices witnessing a cool-off, the subdued global demand because of the rate hike regime by the global central banks, and the export duty imposed by the GOI which will create a supply glut in the domestic markets,” said Punit Patni, Equity Research Analyst, Swastika Investmart.

However, Punit Patni went on to add that long-term investors with moderate to high-risk appetite can accumulate the stock on dips as the demand outlook remains positive in the long term and Indian steel makers are expected to gain due to curtailment of steel production by China and their competitive advantage in terms of low iron ore and labor costs.

Tata Steel stock split

To increase liquidity in Tata Steel stocks, the company board of directors approved stock split citing, "The Board considered the proposal for sub-division of 1 equity share of the Company having face value of ₹10/- each into 10 (Ten) equity shares having face value of Re 1/- each." The company board went on to add that the decision would enable it to widen its shareholders base and make the stock more affordable.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.