Analysts of most of the brokerage firms have increased the target price for Tata Steel shares. Analysts have increased the target price of this stock in view of the company’s joint venture plans with the British government for Britain’s largest steelworks in Wales. Analysts say that this new development is expected to reduce the steel company’s losses from Europe.
“We believe recent developments related to Tata Steel UK will act as a catalyst for the stock price,” said Ravi Sodah, analyst at Elara Capital.
The share price of Tata Steel closed at Rs 130.4 with a decline of 1.5 percent on Monday. In the last one month it has seen a jump of up to 12 percent.
Know the special things related to this deal
Tata Steel and the UK government will invest 1.25 billion euros to set up an electric arc furnace (EAF) steel plant in Port Talbot, Wales. At the same time, the already existing facility will be built from scratch. Tata Steel is currently in loss in Britain.
Analysts Anupam Gupta and Mudit Bhandari of brokerage firm IIFL have said that this step will end the overhang situation of Tata Steel.
Analysts say that the opening of a new facility in place of the company’s already existing facility will help Tata Steel in improving its earnings.
Brokerage changed its target
Ambit Capital has maintained the target for Tata Steel at Rs 155. However, Elara Capital has increased the target price for this share from Rs 134 to Rs 147. Similarly, other brokerage houses have also increased the target price of this stock.