Shares of Tata Steel Ltd. were trading with gains of as much as 2% on Thursday, August 1. The Tata Group company’s first-quarter operational numbers beat estimates. Tata Steel reported a consolidated EBITDA of ₹6,694.4 crore, compared to the CNBC-TV18 poll estimate of ₹6,320 crore.

Tata Steel has spent ₹3,777 crore on capital expenditure during the quarter under review. The phased commissioning of the 5 MTPA expansion at Kalinganagar is progressing well towards blast furnace start-up in September 2024, the company said.

The company’s net debt stood at ₹82,162 crore. “Our group liquidity remains strong at ₹36,460 crore, which includes cash and cash equivalents of ₹10,799 crore,” it said.

Tata Steel may also have to pay over ₹17,000 crore as minerals tax dues to the state of Odisha, if the Supreme Court rules that states can retrospectively impose taxes on mineral extraction.

A nine-judge Constitution bench of the apex court by a majority held that the royalty payable on minerals under the Mines and Minerals (Development and Regulation) Act, 1957 is not a tax.

The SC bench said that states have the power to impose tax and levies such as cess on land in which the mineral is extracted from.

Global brokerage firm CLSA has maintained an ‘Underperform’ rating on Tata Steel, with a price target of ₹

135 per share. According to CLSA, the SC ruling, which announced that the states can levy such tax, would be an overhang on the stock.

Jefferies has a ‘Buy’ rating on Tata Steel with a price target of ₹195 per share.

The foreign brokerage said that Tata Steel’s rise in Q1 EBITDA was driven by the better-than-expected performance of non-TSE subsidiaries. In Europe, the Netherlands operations turned positive EBITDA after six quarters, while the UK business continued to incur EBITDA losses.

JPMorgan has maintained an ‘Overweight’ recommendation on Tata Steel, with a price target of ₹190 per share. The brokerage firm doesn’t see any negatives from Tata Steel’s Q1 print.

However, the company’s net debt has moved higher by 6% quarter-on-quarter. The management’s comments on debt reduction will be crucial.

JPMorgan said that they don’t anticipate significant revisions to consensus estimates.

On the charts, the Relative Strength Index (RSI) of Tata Steel stood at 46.8, indicating the stock is trading neither in the oversold or overbought territory.

At 9:43 am, the scrip was trading 1.73% higher at ₹168.19. Shares of Tata Steel have risen 5.15% in the last five sessions.