Buy Tata Steel, target price Rs 1437: Anand Rathi

Anand Rathi has buy call on Tata Steel with a target price of Rs 1437. The current market price of Tata Steel Ltd. is Rs 1231.6.
Tata Steel Ltd., incorporated in the year 1907, is a Large Cap company (having a market cap of Rs 148577.23 Crore) operating in Metals - Ferrous sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 50249.58 Crore, up 26.23 % from last quarter Total Income of Rs 39809.05 Crore and up 43.22 % from last year same quarter Total Income of Rs 35085.86 Crore. Company reported net profit after tax of Rs 7011.50 Crore in latest quarter.


Investment Rationale
Company delivered strong financial performance with strong revenue growth and margin expansion along with solid free cash flow. Strong recovery in India business, efficient working capital management coupled with sharp capital allocation should improve prospects further. China's withdrawal of export rebates. Japan is also looking to cut steel capacity and reduce exports. Focus in carbon footprint reduction could drive a structural change in the international steel market. This could translate into lower Chinese exports and support global steel prices for longer. Domestic steel prices are at a discount to import parity prices allowing companies to push through price hikes. European operations are also expected to remain profitable with an improvement in spreads.

Promoter/FII Holdings
Promoters held 34.4 per cent stake in the company as of March 31, 2021, while FIIs held 18.6 per cent, DIIs 25.4 per cent and public and others 21.6 per cent.