Tata Steel gets mixed views from analysts as higher input costs offset record domestic volumes

India’s largest steelmaker fell short of analysts’ expectations on the net profit and margin fronts, even as its revenue met their estimates.

Tata Steel shares fell more than three percent to slip into double digits for the first time in more than a week.

“Despite these headwinds, Tata Steel registered best ever domestic sales in India enabled by a strong product portfolio and an extensive distribution network which services end-to-end requirements in chosen segments,” said TV Narendran, CEO and Managing Director, Tata Steel.

CLSA downgraded Tata Steel to ‘sell’ and lowered its target price for the stock by 18 percent to Rs 90 — implying a potential downside of 11 percent from its closing price on Monday.

The brokerage also brought down its earnings estimates for the steel major by 18-25 percent till 2025.

Morgan Stanley continued with an ‘equal-weight’ rating on the stock. Yet, its target price implies downside potential of 6.5 percent in Tata Steel shares.

Investec is positive on Tata Steel shares. The brokerage believes the stock has the potential to grow almost 38 percent in value from current levels.

Motilal Oswal retained its ‘neutral’ call on Tata Steel after the earnings announcement. The brokerage highlighted that generally, steel prices tend to improve in the second half of a financial year compared to the prior six months.

Tata Steel has underperformed the market over the past few weeks, having lost almost seven percent of its value in three months — a period in which the benchmark Nifty50 index has risen 4.5 percent.