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Tata Steel share hits 52-week high after Moody's changes outlook to stable

Tata Steel share hits 52-week high after Moody's changes outlook to stable

Tata Steel stock touched a fresh high of Rs 868.65, rising 6.98% against previous close on BSE

Tata Steel is one of the country's top steel producers with an installed capacity of 20.6 million tonne per annum (MTPA). Tata Steel is one of the country's top steel producers with an installed capacity of 20.6 million tonne per annum (MTPA).

Tata Steel share hit a fresh 52-week high today extending gains for the fifth consecutive session amid a slew of upgrades from foreign brokerages.

The large cap stock touched an intraday high of Rs 868.65, rising 6.98% against previous close on BSE. The stock gained 22.67% in the last five days. Tata Steel share stands higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The stock has gained 223% in one year and risen 34% since the beginning of this year. Market cap of the firm rose to Rs 98,659 crore on BSE.

Moody's has become the latest brokerage to turn positive toward the stock citing a rise in steel demand and prices. It has changed its outlook for Tata Steel to stable from negative. Tata Steel is one of the country's top steel producers with an installed capacity of 20.6 million tonne per annum (MTPA). Moody's forecasts a long-term sustainable EBITDA/tonne of Rs 13,200 for fiscal 2022 for Tata Steel, constituting a 30 per cent gap compared to the December quarter. The company, therefore, has a substantial buffer especially given the benign operating environment, the brokerage said.

On Tuesday, CLSA maintained buy call on the stock with a target price of Rs 950. CLSA said after the significant outperformance of steel stocks over the past year, the brokerage saw further upside as risk-reward remains favourable.

"We expect upward revisions in consensus as current estimates imply a Rs 10,000-12,000/tonne correction in steel prices versus spot. With domestic prices trading at a 10 percent discount to import parity, we believe such sharp correction is unlikely unless demand drops sharply," CLSA said in a note.

Meanwhile, JP Morgan sees steel price hikes in April. It increased FY21-23 estimates by 10-35 percent.

JP Morgan raised the target price of Tata Steel to Rs 1,100 from Rs 960 and is overweight on the stock. The brokerage is overweight on JSW Steel and raised the target price to Rs 510 from Rs 430 earlier. It also maintained Overweight stance on SAIL stock raising the target to Rs 105 from Rs 90 per share.