Tata Steel shares in focus as firm plans Rs 16,000-crore capital expenditure in FY24

Shares of Tata Steel are in focus today after the Tata Group firm said it was planning a consolidated capital expenditure (capex) of Rs 16,000 crore for its domestic and global operations during the current financial year. In the previous session, the metal stock closed at Rs 114.25, up 0.48 per cent on BSE. It touched an intraday low of Rs 113.85 against the previous close of Rs 113.70 on BSE. Total 19.74 lakh shares of the firm changed hands amounting to a turnover of Rs 22.54 crore. Market cap of the Tata Group firm stood at Rs 1.39 lakh crore.  The stock has gained 26.71 per cent in a year and risen 1.42 per cent this year.    

In terms of technicals, the relative strength index (RSI) of Tata Steel stands at 67.2, signaling it's neither trading in the overbought nor in the oversold territory. The stock has a beta of 1.3, indicating very high volatility in a year. Tata Steel shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.   

The Tata Steel stock hit a 52-week high of Rs 124.30 on January 19, 2023 and a 52 week low of Rs 82.71 on June 23, 2022.    

Laxmikant Shukla, Technical Research Analyst at YES Securities expects Tata Steel to reach Rs 131 mark.   

He assigned a Buy call on the stock with a target price of Rs 124-131 and a stop loss of Rs 104.  

“Tata Steel, after showing correction around 17 per cent post registering a high of Rs 124 on 19 January 2023, has bottomed out near the 50 per cent Fibonacci retracement of the previous leg from the support zone of Rs 104-106. Further the upside movement is getting better with the RSI trading above the reference line and bullish crossover in MACD signaling a buy. One can buy and accumulate the stock for an upside initial target of Rs 124 and further strength can carry it to Rs 131, keeping a stop loss of Rs 104 on closing basis,” said Shukla.    

Out of the planned  Rs 16,000 crore capex, Tata Steel has allocated Rs 10,000 crore toward standalone operations and  Rs 2,000 crore for its subsidiaries in India, said  CEO & MD T V Narendran and Executive Director & CFO Koushik Chatterjee.  

 "The projected capital expenditure (capex) for FY2023-24 is set at Rs 16,000 crore on a consolidated basis which is intended to be financed through internal accruals over the full year," according to the company's annual report for 2022-23.

 

Out of this, Rs 10,000 crore has been earmarked towards Tata Steel’s standalone operations of which the Kalinganagar project will account for approximately 70 per cent. The company is in the process of expanding capacity of its plant at Kalinganagar, in Odisha to 8 MT from 3 MT.  

The Tata Group firm reported a 82.5 per cent decline in net profit at Rs 1,705 crore for the quarter ended March 31, 2023 against net profit of Rs 9,756 crore in the year-ago period. Revenue from operations slipped 9 per cent to Rs 62,962 crore in Q4FY23 as compared to Rs 69,324 crore in Q4FY22.   

  

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