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The Tata Steel scrip was the highest gainer in percentage terms among the Sensex stocks on Friday gaining 5.3 per cent (Rs 23.9) and closing at Rs 475 to a share.
Though the company booked a loss of Rs 602 crore in the December quarter on a consolidated basis, experts said that the worst is over for Tata Steel.
“Buying had to come in as the negatives had already been factored in the price of the scrip,” said a Head of Institutional Research of an Indian brokerage.
“With abundant FII liquidity flowing in since the start of this calendar, a blue-chip stock at such valuations is a steal,” he added.
The stock was at its 52-week low on January 2, 2012, at Rs 332.35 a share has risen 43 per cent since then.
Experts said that institutions buying into the scrip know fully well what they are doing. FIIs have pumped in $7.08 billion in the net, since January this year.
“The company's future looks bright and the management optimistic,” said Mr Rajesh Agarwal, Head- Research, Eastern Financiers. “Though it will take a while to turn around Corus, the Tatas know a thing or two about steel better than most.”
The Indian operations have performed well though the bottom line of European operations took a hit on account of interest cost, forex losses and coal prices. The company had to write off Rs 741 crore this quarter due to price revaluation of inventories of raw material and finished goods in its European operations.
> raghavendrarao.k@thehindu.co.in
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