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Why Tata Steel share hit record high today

Share of Tata Steel rose 2.55% to Rs 884.85 against previous close of Rs 862.85 on BSE.

twitter-logoBusinessToday.In | April 7, 2021 | Updated 13:41 IST
Why Tata Steel share price hit record high today
Tata Steel share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Tata Steel share price hit fresh 52 week high today after the company achieved its highest-ever quarterly crude steel production of 4.75 million tonnes. The rally in the Tata Group stock was also backed by a ratings upgrade by S&P Global Ratings.

Share of Tata Steel rose 2.55% to Rs 884.85 against previous close of Rs 862.85 on BSE. Tata Steel share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Tata Steel share has risen 217% in one year and gained 36.03% since the beginning of this year.

In a month, the stock has gained 19.38%. Market cap of the firm rose to Rs 1.05 lakh crore.

The steel manufacturer clocked its highest-ever quarterly crude steel production of 4.75 million tonnes with a 3 percent QoQ growth in Q4FY21. Full-year FY21 production was lower by 7 percent YoY primarily due to the disruption caused by the COVID-19 pandemic in 1HFY21, said the company.

During the quarter, steel production at Tata Steel Europe increased to 2.65 million tonnes and steel sales volume rose by 18 percent QoQ and 4 percent YoY, it added.

Meanwhile, S&P Global Ratings said Tata Steel was on track to trim part of its $15 billion debt in the next two years helped by higher prices and strong cash flows, leading to a ratings upgrade.

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The  international ratings agency said Tata Steel's debt will fall by about 30% by 2023 from about  Rs 1.1 lakh crore ($15 billion) as of March 2020. Around half of this decline is expected to have happened by last month. It upgraded the steel mill's long-term ratings to BB- from B+ and maintained the outlook at stable.

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"The stable outlook reflects our expectation that Tata Steel will significantly reduce debt over the next 12-24 months, supported by strong operational cash flow," S&P said. It also reflects expectations that the company's debt reduction will result in lower volatility in its credit metrics compared with the previous steel cycle, with greater resilience during downturns, the ratings companysaid.

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