Tata Steel stock down 41% from 52-week high: Good time to buy?

Shares of Tata Steel have tumbled 41 per cent from their 52-week high amid highly volatile domestic market impacted by negative global cues.  Tata Steel stock, which hit a 52-week high of Rs 1,534.60 on August 16, 2021 is currently trading at Rs 906, translating into a decline of 41 per cent during the period.

US Fed raising rates, Russia-Ukraine war, high inflation, and resurgence of Covid-19 cases across the world, especially in China have dented sentiment around the Tata Group stock.

Tata Steel stock touched an intraday high of Rs 909.50 against the previous close of Rs 902.10 on BSE today. It also touched an intraday low of Rs 901 on BSE.

Tata Steel shares are trading higher than the 5-day and 20-day moving averages but lower than 50-day, 100-day, and 200-day moving averages. Total 1.75 lakh shares of the firm changed hands amounting to a turnover of Rs 15.88 crore on BSE. The market cap of the firm stood at Rs 1.11 lakh crore on BSE.

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The stock hit a 52-week low of Rs 827.10 on June 23, 2022.

The Tata Group firm reported a 37 per cent rise in consolidated profit at Rs 9,835.12 crore for the quarter ended March 2022, mainly on account of higher income. It reported a net profit of Rs 7,161.91 crore in the year-ago quarter.

During January-March 2022 quarter, Tata Steel's total income climbed to Rs 69,615.70 crore from Rs 50,300.55 crore on a year-on-year basis.

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Here's a look at what analysts said on the outlook of the stock.

Manoj Dalmia, founder and director, Proficient Equities

"Tata Steel is down 41 per cent from the 52-week high. The stock has taken support at Rs 842 levels. We expect the stock price to move upwards in the short term by forming higher highs and lows. The target can be Rs 1,011. The outlook although moderately bullish in the second half of this year due to the export duty on steel, global reduction in prices of metals, and a flat demand due to increasing inflation concerns. The long-term outlook is bullish considering government spending and infrastructure development."

Ravi Singhal, CEO of GCL

"Tata Steel has one more round of selling before it reaches Rs760, but at these prices, it is a good value buy. Risky investors can amass near Rs 800 for a target of Rs 1,111."

Mohit Nigam, Head - PMS, Hem Securities  

"Despite the intricacy of the Covid and geopolitical issues, Tata Steel has produced consistent profit numbers. Its EBITDA was significantly higher than the industry average. Free cash flow for the organisation also indicates optimism for its future development. Tata Steel's stock is in the accumulation zone according to the technical setup, and value buying might start at about Rs 880 levels. Investors may buy at approximately Rs 880 levels with a target of Rs 1,150."

Tirthankar Das, Head of Technical Research, Ashika

"Share price of Tata Steel is seen rebounding from the extreme oversold territory from the key support zone of Rs 870-890, being the 50 per cent retracement (High: Rs 1535; Low: Rs 250) of the entire rally since April 2020. The past few months corrective phase hauled weekly stochastic oscillator in extreme oversold territory (currently placed at 25), indicating an impending pullback. RSI has also bounced from its oversold zone and is positively placed which could fuel the up move. The ADX (currently placed at 40) shows bullish strength, though the negative directional indicator -DMI is still above the +DMI. The presence of Harmonic 'White Swan Sea Pony' since the start of FY22 also indicates the same, a 261.8 per cent retracement of B-C measures around Rs 828. Hence, considering the overall chart structure it can be expected that the stock is in a base-building mode around the key support zone of Rs 870- Rs 890. Hence, investors can accumulate the stock at dip to ride the next leg up move towards Rs 970- Rs 990."

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