Shares of Tata Steel were trading higher on Thursday after a surprise beat on profit led brokerages to issue bullish calls on the stock.

What Happened: The Tata Group firm reported a ₹833.45 crore profit for the quarter under review, a major swing from the ₹6,196.2 crore loss posted in the same quarter last year. The bottom line in the same quarter last year was impacted by a one-time exceptional loss of ₹6,898.90 crore.

The company's revenue from operations came down 3.2% year on year to ₹53,904 crore, compared with the ₹55,682 crore posted in the corresponding quarter of the previous year. Indian steelmakers have been under pressure as pricing stays muted as China floods the market with cheap exports, though steel deliveries in India improved marginally during the quarter.

EBITDA for the quarter stood at ₹6,141 crore with an EBITDA margin of 11.4%, aided by lower employee costs and other expenses.

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Revenue was mostly in line with analyst estimates while the bottom line blew past Dalal Street estimates. Analysts had expected the steel giant to report a revenue of ₹53,943 crore with a loss of around ₹40 crore. EBITDA was pegged at ₹4,847 crore.

Brokerage Views: JP Morgan reaffirmed its “overweight” rating on Tata Steel, setting a price target of ₹180 per share, indicating a potential upside of around 17% from the previous session’s close.

The brokerage noted that Tata Steel’s earnings report lacked any negative surprises and expects a positive market reaction due to the earnings beat against consensus projections.

Meanwhile, Morgan Stanley maintained an “equal-weight” rating with a target price of ₹175 per share. The firm observed that Tata Steel’s consolidated EBITDA reached ₹6,140 crore, surpassing its estimates by 38%.

Looking forward, analysts noted that a key point of interest will be management’s guidance on demand and margin trends for both domestic and international operations in the second half of the fiscal year.

Price Action: Tata Steel’s share price was up 1.15% at ₹155.38 in early trade on Thursday.

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