Tata Steel shares slipped over four percent to become the top Nifty50 loser on Tuesday, a day after the steelmaker reported a quarterly loss of over Rs 2,502 crore loss due to higher expenses.

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"(In December quarter) The British Steel Pension Scheme (BSPS) with Tata Steel UK as Sponsor has completed a substantial part of its de-risking journey with 60% of its liabilities insured. The buy-in transaction along with actuarial movements has resulted in a non-cash deferred tax expense of Rs 1,783 crores and increased the overall deferred tax expense for the quarter to Rs 2,150 crore," Tata Steel said in a statement.

Brokerages have noted that the steelmaker’s Europe business is much weaker than expected with EBITDA/tonne for the region falling on a sequential basis to negative $95/tonne.

Tata Steel CEO and MD T V Narendran said, "In Europe, our deliveries were lower in 9MFY23 due to slowdown in demand. Recession concerns weighed on steel prices, which coupled with elevated energy costs affected our performance.

Koushik Chatterjee, Executive Director and Chief Financial Officer, meanwhile, said, "Global steel prices have witnessed steady moderation amidst inflationary pressures and concerns about economic slowdown in the first nine months of the financial year. Despite this, our consolidated revenues were up 3 per cent y-o-y.”

Morgan Stanley has an equal-weight stance on the firm with a target price of Rs 110/per share. It noted that the firm’s standalone EBITDA was much weaker than estimates though consolidated EBITDA was slightly better than its projection but missed consensus estimates.

CLSA has given it a buy rating and set the target price of Rs 135/share. It pointed out that Tata Steel’s sequential improvement was lower than peers while net debt was broadly flat.

Jefferies, on the other hand, said the rise in standalone EBITDA per tonne was the first improvement after five quarters of decline. It has given a buy rating with Rs 150 per share.

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