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Buy Tata Group Stock That Has Hit 52-Week Low

Buy Tata Group Stock That Has Hit 52-Week Low
Written by bobby
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Buy Tata Group Stock That Has Hit 52-Week Low

Tata Steel Long Products shares hit 52-week lows

Shares in Tata Steel Long Products have hit a new 52-week low on the National Stock Exchange of Rs 615. The stock has recovered a little to Rs 622, but, is barely away from the 52-week lows. In fact, the stock of the company is now down from 52-week high levels of Rs 1174. The company was earlier known as Tata Sponge Iron Limited. Tata Steel Long Products manufactures high alloy steel, primarily for the auto sector and wire rope industry.

With one million tonne capacity, it is one of the largest specialty steel plants in India in the long product segment. The steel plant uses iron ore from its captive mine. The steel plant set up at Jamshedpur is the first steel plant in India to use Hot Metal in Electric Arc Furnace which has become an industry-wide practice now. Besides, Tata Steel Long Products also manufactures and markets sponge iron for use by the secondary steel sector and has a total capacity of 0.90 million tonnes – production units are located in Jamshedpur and Joda.

Reasons to buy the stock of Tata Steel Long Products?

One of the top reasons, the stock of Tata Steel Long Products is a good stock to buy is the valuation. For FY 2022, the company reported revenues of nearly Rs 6801 crores, which was better than that of Rs 4749 crores in the previous year. Tata Steel Long Products reported a net profit of Rs 630 crores for FY 2022, as against Rs 572 crores reported for FY 2021. Overall, it was a good year for the company. Tata Steel Long Products reported an EPS of Rs 139.66 for FY 2022.

This means the stock is trading at a p/e of 4.42, which is extremely cheap. The other reason to be buying the stock of Tata Steel Long Products is the dividend. The shares of the company are available with a dividend of Rs 12.50 per share, which helps to reduce the purchase price even further. The promoters hold 74.91% of the stock, which means the floating stock is not very high. We believe there is a potential for the stock to rally in view of the sharp fall in the price and also in view of the attractive valuations. In fact, with a likely recovery in the auto sector, demand for the company’s products is likely to remain robust.

Buy in small quantities

In our stock recommendations especially for small investors, we have been advocating buying in small quantities. So, if you are looking to buy the stock of Tata Steel Long Products, invest in small quantities. One of the reasons for that is the markets are looking weak and several stocks have fallen from their 52-week highs quite dramatically.

“Equity Markets remained volatile on expected lines. Even India’s VIX surged by 9.6% to 25.6 levels indicating continuing discomfort among investors. Nifty is now facing a strong hurdle around the 16,400 mark. Any bounce around this level is met with stiff resistance along with selling pressure. The market would react to the minutes from the last U.S. Federal Reserve meeting which would be released on Wednesday and could give insights into their future course of action. We expect volatility to continue this week given the uncertain environment as well as the monthly F&O expiry on Thursday,” says Siddhartha Khemka, of Motilal Oswal Financial Services.

About the author

bobby

Hi, I am Bobby. Blogger India. I love writing, and reading articles. Blogging is my passion. I have started my blogging career in 2016.

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