Tata Steel erases losses, ends 3% up, despite posting Rs 2,127 cr loss in Q3

NEW DELHI: Tata Steel made a smart rebound after tumbling as much as 5 per cent in trade on Friday amid rumours that the government was set to impose a minimum import price (MIP) on steel imports, a move that could help step the fall in steel prices in the domestic market and give domestic players a level-playing field against cheaper Chinese imports.

The stock had fallen in the morning session after the steelmaker said its net loss for the December quarter stood at Rs 2,127 crore on account of falling domestic steel prices amid tough competition from Chinese imports.

The company had reported a net profit of Rs 157.11 crore for the corresponding quarter last year. "Consolidated Ebitda came in at Rs 814 crore, down 54 per cent YoY, and well below our expectation of Rs 1,176 crore. Consolidated net loss came in at Rs 1,415 crore (excluding exceptional) against our expectation of Rs 1,387 crore. We retain our neutral rating on the stock," Angel Broking said in a note.

For minute-by-minute market/stock updates, follow our Twitter handle @ETMarkets

The stock rallied in late trading and closed the session at Rs 234, up 3.47 per cent.

Brokerage CLSA has maintained a sell rating on the stock with a target of Rs 170.

In a note, the brokerage said the Q3 numbers were worse than expected.

Major protectionist measures are needed to get company back to profits, the brokerage said, adding that visibility to get company back to profits is low. Credit Suisse too is disappointed with Tata Steel's December quarter earnings.

The foreign brokerage has maintained an underperform trading on the stock with a target of Rs 180. Earnings disappointed on back of high restructuring-related costs at Europe, said Credit Suisse in a note, adding that it expects continued weakness at European operations. The brokerage believes a loss in Q4 may push FY17E EPS estimates further below zero.