Shares of Tata Steel Ltd have been on a downward trajectory since June 2024, experiencing a steep decline of 41% from its 52-week high of Rs 184.60, recorded on June 18, 2024. Currently, the stock is trading near its 52-week low of Rs 122.60, last touched on January 13, 2025. Despite a 2% rise to Rs 131 during the afternoon session today, the stock remains under pressure, reflecting a challenging short-term outlook as indicated by its simple moving averages.
The stock’s current price is below its 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages, signaling a bearish trend. Over the past year, Tata Steel shares have fallen 1%, with modest gains of 9.3% over two years and 6.08% over three years. However, in the past week, the stock has shown slight recovery, rising 2.39%.
Today, the company’s market capitalization stood at Rs 1.62 lakh crore, with 15.24 lakh shares traded, amounting to a turnover of Rs 19.67 crore on the BSE. The stock has a one-year beta of 1.4, indicating significant volatility. Meanwhile, the relative strength index (RSI) is at 35.1, suggesting the stock is neither overbought nor oversold.
Brokerage Opinions and Price Targets
- ICICI Securities: Maintains a “Buy” rating with a target price of Rs 190, emphasizing potential gains as safeguard duties for four years could create a favorable operating environment for steel companies, particularly Tata Steel and JSW Steel.
- Antique Broking and JM Financial: Both set a price target of Rs 175 for the stock.
- Centrum Broking: Projects a price target of Rs 168.
- JP Morgan: Remains “Overweight” on Tata Steel, with a price target of Rs 180.
- Axis Securities: Assigns a target of Rs 175, noting increased sales volumes in FY25 driven by expansions at KPO-II and improved profitability.
Technical Insights
Analysts highlight mixed signals for the stock:
- AR Ramachandran (SEBI-Registered Analyst): Views the stock as bullish on daily charts with strong support at Rs 127. A close above Rs 131 could push the stock toward Rs 144 in the near term.
- Kushal Gandhi (StoxBox): Cautions against buying at current levels due to continued selling pressure and weak price momentum. The stock has broken below critical support at Rs 153 and is trading under its 50-day, 200-day moving averages, and 50-week moving average, which now act as resistance levels. Immediate support is at Rs 126, with potential downside risks if breached. Gandhi notes sectoral weakness in the metals index, which has entered a distribution phase.
- Jigar S Patel (Anand Rathi): Identifies Rs 126 as a key support level and Rs 133 as resistance. A decisive breakout above Rs 133 could lead to a short-term target of Rs 138.
Future Outlook
Axis Securities highlighted potential growth in sales volume for FY25, driven by expansions at Tata Steel’s KPO-II facility and additional contributions from NINL. The ramp-up at KPO-II is expected to lower costs and enhance profitability in the coming years, with significant benefits expected by FY27.
In conclusion, while Tata Steel shows signs of recovery in the short term, it remains under considerable pressure due to broader market trends and sectoral challenges. Analysts recommend caution, with potential upside contingent on key technical and operational milestones.
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