⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
TATASTEEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | TATASTEEL | Market Cap | 2,43,841 Cr. | Current Price | 195 ₹ | High / Low | 216 ₹ |
| Stock P/E | 15.5 | Book Value | 107 ₹ | Dividend Yield | 1.84 % | ROCE | 12.7 % |
| ROE | 10.9 % | Face Value | 1.00 ₹ | DMA 50 | 195 ₹ | DMA 200 | 177 ₹ |
| Chg in FII Hold | 0.20 % | Chg in DII Hold | 0.06 % | PAT Qtr | 4,086 Cr. | PAT Prev Qtr | 4,360 Cr. |
| RSI | 48.0 | MACD | -2.00 | Volume | 3,15,16,001 | Avg Vol 1Wk | 3,94,72,046 |
| Low price | 124 ₹ | High price | 216 ₹ | PEG Ratio | -0.65 | Debt to equity | 0.52 |
| 52w Index | 77.0 % | Qtr Profit Var | 2.45 % | EPS | 11.7 ₹ | Industry PE | 20.1 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT declined slightly from ₹4,360 Cr. to ₹4,086 Cr. (-2.45%), showing stable but pressured earnings.
- Margins: ROE at 10.9% and ROCE at 12.7% reflect moderate profitability and efficiency.
- Debt: Debt-to-equity ratio of 0.52 indicates moderate leverage, manageable but worth monitoring.
- Cash Flow: Supported by strong steel demand, though cyclical risks remain.
💹 Valuation Indicators
- P/E Ratio: 15.5 vs Industry PE of 20.1 → undervalued compared to peers.
- P/B Ratio: Current Price ₹195 vs Book Value ₹107 → ~1.82x, reflecting fair valuation.
- PEG Ratio: -0.65 → signals weak growth outlook despite low valuation multiples.
- Intrinsic Value: Estimated fair value near ₹180–190, suggesting current price is close to fair value.
🏭 Business Model & Competitive Advantage
- Operates in steel manufacturing with global presence across Europe and Asia.
- Competitive advantage lies in scale, Tata Group backing, and diversified product portfolio.
- Challenges include cyclical demand, raw material costs, and global trade dynamics.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive between ₹180–190, aligning with intrinsic value.
- Long-Term Holding: Suitable for 5+ year horizon; strong fundamentals and Tata Group stability make it a solid long-term bet, though cyclical risks remain.
✅ Positive
- P/E ratio (15.5) is lower than industry average, indicating undervaluation.
- FII holdings increased (+0.20%), reflecting foreign investor confidence.
- DII holdings increased (+0.06%), showing domestic institutional support.
⚠️ Limitation
- ROE (10.9%) and ROCE (12.7%) reflect only moderate efficiency.
- PEG ratio (-0.65) signals weak growth outlook.
- Debt-to-equity ratio (0.52) adds financial risk in cyclical downturns.
📉 Company Negative News
- Quarterly PAT declined from ₹4,360 Cr. to ₹4,086 Cr., showing earnings pressure.
- Global steel demand remains cyclical and sensitive to commodity prices.
📈 Company Positive News
- FII and DII holdings increased, reflecting investor confidence.
- Strong Tata Group backing provides credibility and stability.
- Undervalued compared to industry peers on P/E basis.
🏭 Industry
- Steel industry is cyclical, driven by infrastructure, construction, and global trade.
- Industry PE at 20.1 shows sector is moderately valued compared to Tata Steel’s lower P/E.
- Government infrastructure push supports long-term demand.
🔎 Conclusion
Tata Steel demonstrates moderate fundamentals with stable profits, fair ROE/ROCE, and manageable debt. Valuations are attractive with a P/E below industry average, though PEG ratio signals weak growth outlook. Entry around ₹180–190 offers favorable risk-reward. Long-term investors can hold for 5+ years, benefiting from Tata Group stability and infrastructure demand, while monitoring cyclical risks and global trade dynamics.