Tata steel shares: Should you buy, sell or hold after stock split

Tata steel shares: Due to the company’s board of directors setting the record date for the Tata Steel share split on August 1, 2022, trading in Tata Steel shares will begin on Friday. The 10:1 stock split for Tata Steel has been announced by the Tata Group organization.

Before going ex-split, Tata Steel’s share price today opened positively and eventually reached an intraday high of $100.35 per share on the NSE, posting a Thursday morning advance of around 4%.

Stock market experts predict that Tata Steel will continue to gain from increased demand brought on by the domestic market’s recovery in the auto industry. Still, much will depend on the rise in steel prices in the European markets. Commodity stocks may face pressure on their margins if the price of steel fails to increase in European goods.

Tata steel shares

Sumeet Bagadia, Executive Director at Choice Broking, advised positioned investors to retain their buy-on-dips approach regarding Tata Steel shares, stating that they might gain between 25% and 40% in the following three to five months.

The analyst with Choice Broking continued, “Traders can take positions in the counter with a stop loss of 90 for a target price of 115, while positional investors can purchase the counter and keep adding on dips with a stop loss of 85 for each level.” In the upcoming three months, the price of Tata Steel stock could increase to 125.

Avinash Gorakshkar, Head of Research at Profitmart Securities, commented on the prospects for the share price of Tata Steel by saying, “Despite a sharp decrease in steel prices in the European and other foreign markets, Tata Steel has managed to generate improved Q1 results. This is a result of the industry’s vehicle sentiment improving. In the ensuing two to three years, it is anticipated to increase demand for the company in local markets. However, if the price of steel doesn’t increase in the US, China, or other markets like Europe, its margins might come under pressure in the ensuing quarters.

“Tata Steel Ltd. began trading EX Split as of right now. From a short- to medium-term perspective, we have a neutral outlook on the company as the normalization of profitability has begun as a result of cooling steel prices, muted global demand as a result of rate hikes by major central banks, and export duties imposed by the GOI that will lead to a supply glut in domestic markets, according to Punit Patni, an equity research analyst at Swastika Investment.

Punit Patni continued, “However, long-term investors with moderate to high-risk appetite can accumulate the stock on dips as the demand outlook remains positive over time, and Indian steel makers are expected to benefit from China’s reduction in steel production as well as their competitive advantage in terms of low iron ore and labor costs.

stock split for Tata Steel

The board of directors of the company approved a stock split to increase the liquidity of Tata Steel’s shares, citing that “The Board considered the proposal for sub-division of 1 equity share of the Company having face value of 10/- each into 10 (Ten) equity shares having face value of Re 1/- each.” The firm board continued by saying that by making the decision, it would be able to increase the number of shareholders and lower the price of the shares.

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