Shares of Tata Steel have plunged 60 per cent in over two months, leaving investors guessing that what direction the stock of the Tata Group firm will take amid a highly volatile market. The stock which hit an intraday high of Rs 1,386.25 on April 6 is currently trading at Rs 867.05, translating into a decline of 59.88 per cent during the period.

The large cap stock touched an intraday high of Rs 882, rising 2.42 per cent on BSE. Tata Steel shares are trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

Total 2.92 lakh shares of the firm changed hands amounting to a turnover of Rs 19.97 crore on BSE. The market cap of the firm stood at Rs 1.05 lakh crore on BSE.

The stock hit a 52-week high of Rs 1,534.60 on August 16, 2022 and a 52-week low of Rs 843 on June 20, 2022.

Brokerages and analysts are not very optimistic about the outlook for the stock.

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CITI has reduced its target price to Rs 1,085 against the earlier Rs 1,800.  However, it has maintained buy stance on the stock.

The global brokerage said, "Take a relook at earnings estimates and cut EBITDA by 32 per cent /34 per cent on lower realisations following weakness in China export prices. However, think now maybe time to bottom fish."

"Tata Steel's price to book value at 0.8 times isn't too far from 1 standard deviation below mean (0.7x). We reckon stock may not hit 2020 trough of 0.5x given expectations of a China stimulus and a significantly strong balance sheet (perhaps strongest in last 15 years)," the brokerage added.

Financial services firm Motilal Oswal has assigned a neutral rating to Tata Steel stock. It has revised target price to Rs 965 against Rs 1,410 earlier.

 "We believe Tata Steel standalone's 1HFY23 EBITDA is likely to contract by 66 per cent over 1HFY22 driven by lower ASP, lower demand and peak coking coal costs and high base effect. India operations will not benefit from lower iron ore costs or discounted Russian coal. Hence, the cost structure will only benefit from the reduction in coking coal prices that too for 70-75 per cent of requirement as India operations are captive on coking coal for the balance," Motilal Oswal said.

"We cut our FY23E consolidated EBITDA by 22 per cent, driven by 34 per cent reduction in standalone EBITDA offset by 4 per cent increase in TSE EBITDA. The reduction in domestic EBITDA is a combination of a) lower than expected sales volume, b) reduction in ASP and c) higher than estimated coking coal cost," the brokerage added.

Manoj Dalmia, founder and director, Proficient Equities

"Tata Steel is currently forming an inside bar after a trendy move it is now going sideways. It might turn volatile at the current price level. If it breaks the current level, then it might go downwards to Rs 768 levels. Some buying can be done at current levels and further at Rs 768. Recommend to accumulate at dip with a long-term view."

Ravi Singhal, Vice Chairman, GCL Securities

"Stock still looks weak but near 750 it is good value buy for long term."

Ravi Singh, vice President and head of Research, Share India

"Steel prices are not getting support due to slowdown in China. Unless the Chinese government announces a massive stimulus to revive the economy, there will be a possibility of curbing economic activity. Also, to limit the volatility in steel prices, China reintroduced several rules to control the trading.  These set of rules resulted in significant cool of in the metal prices. Tata Steel stock may remain weak for some more days and value buying will trigger around Rs 950 levels."

AR Ramachandran, Co-founder & Trainer, Tips2Trade

"Weaker global markets due to high inflation have led to a capitulation in metal stocks including Tata Steel. Technically, stock looks oversold. Investors can start buying only if daily close is above Rs 905 for targets of Rs 990 in the coming weeks."

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