Invest in Tata Steel for All-Time Rewards? Bonus, Split, and 28 Payouts Explained Amidst Bullish Rs 210 Target
Tata Steel offers a compelling long-term case through its history of shareholder rewards—a 1:2 bonus in 2004, 1:10 stock split in 2022, and 28 dividends since 2003—now paired with analyst targets up to ₹210 amid capacity expansion and steel pricing tailwinds. The stock trades around ₹165–170, implying 20–25% upside to high-end calls, with brokerages like ICICI Direct and Emkay citing India business strength and Europe stabilisation as key drivers.
Corporate Actions Breakdown
Tata Steel's 1:2 bonus issue in August 2004 doubled shares for every two held, boosting liquidity without diluting value, a classic reward during strong cycles. The 2022 1:10 split reduced face value from ₹10 to ₹1, multiplying shares tenfold to enhance retail access and trading volumes amid post-pandemic recovery.
These actions sit atop 28 dividends from June 2003, including steady ₹3.60/share finals (360% yield) and a standout ₹51/share in FY22 when cash flows peaked. Such consistency in a cyclical sector underscores Tata Steel's capital discipline, funding expansions while returning cash.
Analyst Targets and Bull Case
ICICI Direct sets the highest ₹210 target via SOTP: 8.5x EV/EBITDA on India (core profit driver) and 4x on Europe (FY27 estimates). Emkay's ₹200 BUY echoes this, forecasting stable spreads from safeguard duties and capacity ramps. Aggregators show 12-month highs near ₹200–220, assuming deleveraging and 10–15% EBITDA growth.
India operations anchor optimism: expansions to 40 MTPA by FY27, premium flat products, and infra/auto demand. Europe benefits from import curbs, though costs linger.
Financial Backbone and Risks
Deleveraging has cut debt sharply, enabling dividends amid ₹2 lakh crore+ market cap. Cyclical risks dominate: China exports, coal/ore volatility, Europe green levies could compress margins. Valuations at 5–6x EV/EBITDA offer cushion but demand execution.
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