TATASTEEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | TATASTEEL | Market Cap | 2,63,852 Cr. | Current Price | 211 ₹ | High / Low | 218 ₹ |
| Stock P/E | 16.8 | Book Value | 107 ₹ | Dividend Yield | 1.70 % | ROCE | 12.7 % |
| ROE | 10.9 % | Face Value | 1.00 ₹ | DMA 50 | 202 ₹ | DMA 200 | 183 ₹ |
| Chg in FII Hold | 1.09 % | Chg in DII Hold | -0.31 % | PAT Qtr | 4,086 Cr. | PAT Prev Qtr | 4,360 Cr. |
| RSI | 57.7 | MACD | 4.22 | Volume | 2,63,26,581 | Avg Vol 1Wk | 3,33,56,266 |
| Low price | 139 ₹ | High price | 218 ₹ | PEG Ratio | -0.70 | Debt to equity | 0.52 |
| 52w Index | 91.3 % | Qtr Profit Var | 2.45 % | EPS | 11.7 ₹ | Industry PE | 22.9 |
📊 TATASTEEL (Tata Steel Ltd.) demonstrates decent fundamentals with ROE of 10.9% and ROCE of 12.7%, reflecting moderate efficiency. EPS of ₹11.7 provides earnings visibility, while quarterly PAT remained stable (₹4,360 Cr → ₹4,086 Cr). Valuations are fair with a P/E of 16.8 compared to industry average of 22.9, though a negative PEG ratio (-0.70) indicates limited growth prospects. Dividend yield of 1.70% adds income support. Debt-to-equity ratio of 0.52 highlights moderate leverage. Technical indicators show bullish momentum with MACD at 4.22 and RSI at 57.7, supported by price trading above both 50 DMA (₹202) and 200 DMA (₹183). The stock is near its 52-week high (₹218), suggesting strong investor sentiment.
💰 Ideal Entry Price Zone: ₹205 – ₹210 (near 50 DMA support).
📈 Exit / Holding Strategy: Hold for 3–5 years; consider partial profit booking near ₹215–₹220 resistance unless earnings growth improves. Long-term holding is justified given stable fundamentals and sectoral demand, though growth remains modest.
✅ Positive
- Fair valuation with P/E (16.8) below industry average (22.9).
- Stable quarterly PAT (₹4,086 Cr).
- Dividend yield of 1.70% provides income support.
- Price trading above both 50 DMA and 200 DMA.
- FII holdings increased (+1.09%), showing foreign investor confidence.
⚠️ Limitation
- Negative PEG ratio (-0.70) indicates poor growth prospects.
- Moderate ROE (10.9%) and ROCE (12.7%).
- Debt-to-equity ratio of 0.52 reflects moderate leverage.
- DII holdings decreased (-0.31%), showing reduced domestic support.
📉 Company Negative News
- Quarterly PAT declined slightly from ₹4,360 Cr to ₹4,086 Cr.
- Growth outlook remains modest with negative PEG ratio.
📈 Company Positive News
- Stable profitability and fair valuation relative to peers.
- Foreign institutional investors increasing stake.
- Technical strength with price near 52-week high.
🏭 Industry
- Steel sector trading at PE 22.9, offering higher valuation levels than TATASTEEL.
- Industry supported by infrastructure demand and global commodity cycles.
🔎 Conclusion
TATASTEEL is a stable candidate for long-term investment with fair valuations and consistent profitability. Entry near ₹205–₹210 offers favorable risk-reward. Hold for 3–5 years with profit booking near ₹215–₹220 resistance. While fundamentals are stable, modest growth and leverage limit upside potential, making it more suitable for steady portfolio inclusion rather than aggressive growth.