Tata Steel tanks 5% after posting Rs 2,127 cr Q3 loss

Shares of Tata Steel tumbled 5 per cent in Friday's trade after the steelmaker reported a net loss of Rs 2,127 crore for the December quarter on falling domestic steel prices due to tough competition from Chinese imports.

The company had reported a net profit of Rs 157.11 crore for the corresponding quarter last year. "Consolidated Ebitda came in at Rs 814 crore, down 54 per cent YoY, and well below our expectation of Rs 1,176 crore. Consolidated net loss came in at Rs 1,415 crore (excluding exceptional) against our expectation of Rs 1,387 crore. We retain our neutral rating on the stock,
 

The stock fell 4.93 per cent to hit a low of Rs 215 on BSE.Brokerage CLSA has maintained a sell rating on the stock with a target of Rs 170.In a note, the brokerage said the Q3 numbers were worse than expected.Major protectionist measures are needed to get company back to profits, the brokerage said, adding that visibility to get company back to profits is low. Credit Suisse too is disappointed with Tata Steel's December quarter earnings.
 

The foreign brokerage has maintained an underperform trading on the stock with a target of Rs 180. Earnings disappointed on back of high restructuring-related costs at Europe, said Credit Suisse in a note, adding that it expects continued weakness at European operations. The brokerage believes a loss in Q4 may push FY17E EPS estimates further below zero.

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