Shares of Tata Steel rose more than a percent on Tuesday, reacting to higher-than-expected earnings on all fronts-profit, revenue, EBITDA and margin. However, the stock erased early gains and slipped into negative territory soon after.

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JP Morgan said that the substantial all-round beat was driven by the Europe business. Vikash Singh, vice president of metals and mining at PhillipCapital, also said the Europe performance was not built-in in anybody's estimates.

PhillipCapital has a ‘buy’ call on the stock, with a target price of Rs 210, but a price fall is yet to reflect. “We are advising not to add freshly in the stock and to hold on to the stock at this point. If the stock touches 4-5 percent today, then some profit booking is what we are advising,” he added.

With regards to Europe operations, though the volumes in the second half would be good, EBITDA per tonne should come down in the range of $100-200 per tonne, which makes the brokerage build in $150 per tonne on an average going forward.

At 9:40 am, shares of the steelmaker were trading 0.7 percent higher at Rs 967.2 on the BSE.

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JPMorgan said that even as the second quarter is seasonally weak, there should be a rebound. The global brokerage firm also said that steel prices have bottomed in India with limited imports and steady underlying demand.

It has an ‘overweight’ call on the steel manufacturer’s stock with a target price of Rs 1,400.

Here’s a look at the company’s financials:

Gurmeet Chadha, managing partner and chief investment officer at Complete Circle Consultants, said Tata Steel did well on the domestic front considering that the export duty came mid-quarter.

“I think they have a better product mix. So, the demand environment domestically is good with automotive segment, retail housing demand, government push on infrastructure,” he said.

On the global front, he believes the demand is a little clouded with the war crisis and Chinese demand being uncertain.

“I think you've got to be tactical. Tata Steel probably stands out. If I were to take a call between anything which is available right now, it would be Tata Steel. But you got to have a trading call on it rather than a fundamental call. So if you get it lower, you make certain money, you should take something off the table,” Chadha said.

After the results, T V Narendran, Chief Executive Officer and Managing Director of Tata Steel, said the company's European business delivered a sharp improvement in performance as long-term contracts, and product mix helped drive a strong increase in realisations.

Meanwhile, Koushik Chatterjee, executive director and chief financial officer, said he saw volatility in terms of steel price and input cost movement to continue in the next quarter but expected the spreads to stabilise in the second half of the year.

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First Published:Jul 26, 2022 11:09 AM IST