Why Tata Steel Share Price is Falling

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
Top Ad

Find Out

How to Find One Stock with Crorepati Potential? >> READ MORE

Why Tata Steel Share Price is Falling

May 23, 2022

Why is Tata Steels Share Price Falling?

Tata Steel share price has been experiencing volatility in 2022. The share price was falling at the beginning of the year.

However, the scenario changed in March 2022 when Tata Steel shares turned around and rose.

But this did not last long. Shares of the steel major again started falling in May.

Today, shares of Tata Steel slumped over 12% and hit a 52-week low of Rs 1,003.

But what caused today's sharp fall? What suddenly changed that pushed down Tata Steel shares?

Read on to find out...

Changes in the steel sector

Over the weekend, on 21 May 2022, Finance Minister Nirmala Sitharaman introduced changes in the customs duties on steel.

The ministry notified export duty on as many as 11 iron and steel intermediaries and lowered import duties on 3 raw materials.

According to the notification, the export duty was increased on one item while ten fresh items are being brought into the tax net.

These changes are brought to ensure the local availability of steel in India.

Thus the domestic prices of steel will fall because exports are discouraged. This will leave an impact on share prices of the steel sector.

Tax rate and share price is inversely proportionate to each other. Hence, when a tax on any commodity is increased, the share price of the producing company is bound to fall.

This happened with the share price of Tata Steel. Owing to the rise in duty announced on Saturday, the share price saw a rapid fall on Monday.

Shares of Tata Steel opened at Rs 1,095.1 today, which is 6% lower compared to its previous closing price.

Within a couple of minutes of market opening, shares of the company extended its losses. It ended the day over 12% lower.

A huge impact of export duty rise is seen on Tata Steels because 15-20% of Tata Steel's sales comes from export of steel.

How are other metal stocks performing today?

A minor pebble is enough to send a weak cart tumbling down. The cart of metal stocks was already weak.

Note that metal stocks have been under a lot of pressure lately. The metal sector was already facing issues like the economic slowdown of China, change in the demand-supply of steel, etc.

To know more, check out our editorial on why metal stocks are falling .

Meanwhile, chartist Brijesh Bhatia today shared his view on metal stocks and whether the rally in metal stocks is over.

You can read it here: Metals Stocks Start on a Rusty Note. Is the Rally Over?

The cart was already moving with difficulty. But the pebble of export duty sent the steel sector tumbling down.

What the future of Tata Steel looks like...

Despite the adverse situation in the steel sector, the financial statements of Tata Steel paint a bright picture.

In financial year 2021-2022, Tata Steel's sales have increased around 54% compared to the previous year.

For the full financial year 2021-22, Tata Steel reported good earnings. Its net profit rose to Rs 417.5 bn. This is a more than five-fold jump from previous year's net profit of Rs 81.9 bn.

Tata Steel became the Tata group company's most profitable company, surpassing Tata Consultancy Services (TCS) after several years, aided by rising steel prices due to the commodity supercycle.Thus, Tata Steel's share price may be falling due to market circumstances, but its financials are very sound. This indicates a positive sign for long-term investors.

However, investors have to be very careful. The markets are constantly changing. These changes have a big impact.

Investors must keep themselves updated with all the changes.

To know more about Tata Steel, check out Tata Steel's financial factsheet and its latest quarterly results.

You can also compare Tata Steel with its peers.

Tata Steel vs SAIL

Tata Steel vs JSW Steel

Tata Steel vs Jindal Stainless

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Equitymaster requests your view! Post a comment on "Why Tata Steel Share Price is Falling". Click here!

  

More Views on News

TATA STEEL 2021-22 Annual Report Analysis (Annual Result Update)

Jun 8, 2022

Here's an analysis of the annual report of TATA STEEL for 2021-22. It includes a full income statement, balance sheet and cash flow analysis of TATA STEEL. Also includes updates on the valuation of TATA STEEL.

Specialty Steel PLI Scheme - 4 Big Takeaways (Views On News)

May 27, 2022

The PLI scheme is all set to double speciality steel production in the country and increase exports.

Tata Steel Announces Dividend and Stock Split. 5 Takeaways from the Company's Q4 Earnings (Views On News)

May 4, 2022

For fiscal 2022, Tata Steel clocked a net profit of Rs 417.5 bn, a more than five-fold jump from previous fiscal's figures.

Why Jindal Steel Share Price is Falling (Views On News)

May 31, 2022

Jindal Steel has gone from a 52 week high to a 52 week low in less than two months. Check out the reasons why there is such a phenomenal dip.

Why Godawari Power Share Price is Falling (Views On News)

May 24, 2022

Godawari Power shares melt down after government imposes custom duties. Find out other reasons why it could be falling...

More Views on News

Most Popular

4 Sectors to Watch for Future Multibagger Stocks (Views On News)

Jun 17, 2022

With India's economic recovery accelerating, these sectors are likely to give multibagger returns in the future.

Why Tata Power Share Price is Falling (Views On News)

Jun 14, 2022

Here's why shares of Tata Power have fallen in recent days.

Is it Time to Start Buying Stocks Selectively? (Profit Hunter)

Jun 16, 2022

Some sectors have corrected by 50%. Do they merit a look?

Best Monopoly Stocks to Own in 2022 Views On News (Views On News)

Jun 18, 2022

Constant product innovation, latest technology, strong supply chain etc can all help companies enjoy monopoly like fortunes.

When Will the Stock Market Recover? (Views On News)

Jun 15, 2022

This is how you can tell the market is going to recover.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

TATA STEEL SHARE PRICE


Jun 24, 2022 (Close)

TRACK TATA STEEL

  • Track your investment in TATA STEEL with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

COMPARE TATA STEEL WITH

MARKET STATS