Nov 12, 2012 03:47 PM IST | Source: Moneycontrol.com

Tata Steel drops 2.4% on CLSA downgrade post results

Shares of Tata Steel, the world's sixth largest steel making company dropped as much as 2.4 percent on Monday as CLSA has downgraded the stock from outperform to sell with a target price of Rs 325 after disappointing results.

Tata Steel drops 2.4% on CLSA downgrade post results

Shares of Tata Steel, the world's sixth largest steel making company dropped as much as 2.4 percent on Monday as CLSA has downgraded the stock from outperform to sell with a target price of Rs 325 after disappointing results.

"Results disappointed with EBITDA coming in 33 percent below estimates. Margins weakened sharply driven by the falling cost curve in case of India operations and weakening demand-supply in case of Corus and both factors are unlikely to reverse anytime soon," CLSA explained.

Operating profit margin was 6 percent - much lower than streets estimates - in second quarter as against 7.9 percent in a year ago period, indicating costs pressures still persist.

Earnings before interest, tax, depreciation and amortisation (EBITDA) went down by 20.7 percent year-on-year to Rs 2,044.7 crore in the second quarter earnings.

Today at 14:35 hours IST, the stock fell 1.9 percent to Rs 383.15 on the Bombay Stock Exchange. On Friday, it had lost 3.25 percent.

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