Tata Steel shares approach 52-week high; what should investors do? 

Shares of Tata Steel Ltd have approached their 52-week high after hitting the yearly record in January 2023.  The Tata Group’s metal stock touched a 52-week high of Rs 124.30 on January 19, 2023.  On August 14 (Monday), Tata Steel stock closed 1.79% lower at Rs 118.15 on BSE. The metal stock has lost 1% this year. On the other hand, Tata Steel shares have gained 10.68% in six months. The Tata Steel stock has climbed 4.88% in a year. The stock has delivered stellar 182% returns in the last three years.   

In the previous session, it touched an intraday low of Rs 117.35 against the previous close of Rs 120.30 on BSE. Total 19.75 lakh shares of the firm changed hands amounting to a turnover of Rs 23.36 crore. Market cap of the Tata Group firm fell to Rs 1.44 lakh crore.    

In terms of technicals, the relative strength index (RSI) of Tata Steel stands at 51, signaling it's neither trading in the overbought nor in the oversold territory. The stock has a beta of 1.2, indicating high volatility in a year. Tata Steel shares are trading higher than the 50 day, 100 day, 200 day but lower than the 5 day, 10 day and 20 day moving averages.    

The Tata Steel stock hit a 52 week low of Rs 95 on September 28, 2022.     

Here’s a look at the outlook of the Tata Group stock: 

Abhijeet from Tips2trades said, "Tata Steel is bearish on the daily charts with strong resistance at Rs 123 A close below the daily support of Rs 117 could lead to Rs 111 in the near term."  

Progressive shares in a report said, "The stock has given a breakout from the Symmetrical Triangle Formation. RSI oscillator replicates price activity. The stock is about to start its trend as ADX stands at 19.75. As per symmetrical triangle breakout, the target comes to Rs 172. One can add the stock on declines to Rs 117."  

Tata Steel on July 24 reported a 92% year-on-year decline in its Q1 consolidated net profit (attributable to owners of the company) to Rs 633.95 crore against a profit of Rs 7,764.96 crore in the year-ago period. Consolidated net profit slipped 63% from Rs 1,704.86 crore in Q4FY23.   

YES Securities has assigned the target price of Rs 133 per share.   

“In terms of the operational performance, the consolidated production stood at 7.13 mt, reporting  a  fall of  7.9%  on  a  YoY  basis  and  8.6%  on  a  QoQ  basis.  The  production downfall  is  on  the  back  of  the  blast  furnace  shutdown  in  Netherlands  for  relining purposes. The deliveries on the other did not drop as much because of the company’s earlier efforts for stocking up on inventory. The deliveries for the quarter came in at 7.20 mt, a rise of 8.8% on a YoY basis, however showing a fall of 7.5% on a QoQ basis. We revise  our rating  from BUY to ADD as we  believe the  stock has  shown good returns since the start of the Q2FY24 on the back of stabilising raw material pricing. We maintain our positive outlook on the steel story in India and maintain our target price of Rs 133 per share for Tata Steel,” said the brokerage.  

Centrum Broking has also assigned a target price of Rs 133 per share.   

"Tata Steel’s profitability is expected  to remain solid  amid strong  domestic demand  and moderation in raw material prices. Besides, in India it has commissioned 6 mtpa pellet plant and 2.2 mtpa CRM facility, while at Netherlands upgraded CRM which will enhance product mix portfolio and earnings as well. Further, NINL is expected to start contributing to overall volumes while major contribution from Kalinganagar Phase 2 expansion is expected to reflect in FY25. We maintain BUY with target price of Rs 133," the brokerage said.  

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