Home / Markets / Stock Markets /  Tata Steel shares: Should you buy the metal stock after surprise loss in Q3?

Tata Steel Ltd posted a net loss of 2,224 crore at the consolidated level in the December 2022 quarter, hurt by a sharp fall in global steel prices and lower demand amid fears of a likely economic slowdown. The steel production company's revenue from operations declined 6% to 57,083 crore for the period under review as as compared to 60,783 crore in the year-ago period.

Recession concerns weighed on steel prices, which coupled with elevated energy costs affected our performance while steel prices were subdued in India, European operations witnessed margin compression due to lower realisations and elevated input costs, T.V. Narendran chief executive officer (CEO) said in a statement.

Tata Steel's Q3 reported EBITDA fell 33% QoQ and was 36% below JEFe, led by weak TSE (Europe) margins. Standalone EBITDA/t rose 10% QoQ, the first improvement after 5 quarters of decline. TSE made an EBITDA loss, though, with EBITDA/t of -$95 on lower realizations. Q3 pre-ex PBT was 1.8 bn, but TATA reported a net loss of 22 bn, pulled down by noncash deferred tax items related to the UK pension plan. Net debt was flat QoQ. Conference call is at 2 pm IST on 7 February," said global brokerage while maintaining its Buy rating on Tata Steel shares with a target price 150.

Tata Steel group is among the top global steel companies with an annual crude steel capacity of 34 million tonnes per annum. It is one of the world's most geographically diversified steel producers, with operations and commercial presence across the world. The group recorded a consolidated turnover of $ 32.83 billion in the financial year ending March 31, 2022. The metal stock is down nearly a per cent in a year's period.

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

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