Shares of Tata Steel on Wednesday turned ex-dividend on Wednesday. The Board of Directors of the Tata Group company has fixed June 16 as record date for Rs 51 per share dividend. The company has announced the dividend on May 4, 2022.
“Recommended a dividend of Rs. 51 per fully paid-up Ordinary Share of ₹10/- each (510%) to the shareholders of the Company for the Financial Year ended March 31, 2022,” Tata Steel said in a regulatory filing on May 4.
Meanwhile, after hitting two back-to-back 52-week lows, shares of Tata Seel gained over three per cent in Wednesday’s intraday trade to Rs 974.15 per share on the BSE. Tata steel has remained under pressure in the last one month and gave a negative return over the period of one year. As on June 15, Tata Steel stock declined nearly 12% and yielded a negative return of over 17% in the past one year.
What’s causing huge correction in metal stocks?
The downfall in metal stocks, including Tata Steel, comes amid several headwinds related to this sector. As per Zee Business report, the price of steel has drastically come down by Rs 12000-Rs 15000 in the past six months. In the past one month, a decline of up to 14% has been witnessed in steel products. The fall in steel prices was attributed to a weak demand, sharp cut in iron ore prices and imposition of export duty on select steel products.
Tata Steel share Target Price?
Brokerage house B&K Securities maintained a buy rating on Tata Steel with a massive target price of Rs 1729, which translates into an uspide of around 83% on Tuesday’s closing price of Rs 945 per share on the BSE.
It said We believe the market is ignoring the balance sheet structural changes made by steel companies in the last two years through rapid de-leveraging, sensible capital allocation strategy and improvement in base level RoEs.
As per the brokerage, Tata Steel on the current valuation scores very highly as a value pick. Stress testing of EBITDA/tonne and corresponding valuations have been highlighted. Factor of safety is high, though the stock may languish for a bit till there is more clarity on demand, pricing, coking coal, etc. and may not catch a momentum in investor’s fancy immediately until the narrative changes somewhat.
“We are maintaining our Buy rating for the stock with the target price of Rs 1,729,” it added.