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Nov 13, 2012, 06.05 PM IST | Source: Moneycontrol.com

Buy Tata Steel; target of Rs 463: Angel Broking

Angel Broking is bullish on Tata Steel and has recommended buy rating on the stock with a target of Rs 463 in its November 9, 2012 research report.

Angel Broking is bullish on Tata Steel and has recommended buy rating on the stock with a target of Rs 463 in its November 9, 2012 research report.

“Tata Steel’s Indian operations posted a net sales growth of 12.4% yoy to Rs9,151cr driven by increases in both, volumes (+5.0% yoy) as well as realization (+8.3% yoy). However, the EBITDA fell by 6.8% yoy to Rs2,516cr and EBITDA margin slipped 566bp yoy due to rising costs of raw material and higher power costs. The PAT fell by 10.3% yoy to Rs1,341cr due to higher interest and depreciation charges.”

“The company’s consolidated net sales rose marginally by 4.1% yoy to Rs34,133cr due to subdued performance from Tata Steel Europe (TSE). TSE reported an EBITDA/tonne of negative US$2 compared to +US$28 in 2QFY2012. Consequently, the company reported an adjusted net loss of Rs407cr which was aggravated by higher deferred tax provisions and interest expenses.”

“We continue to maintain our positive stance on Tata Steel owing to its buoyant business outlook, driven by a) higher sales volume in FY2014 on the back of 2.9mn tonne brownfield expansion project in Jamshedpur, b) raw-material projects at Mozambique and Canada and c) restructuring initiatives at TSE. We maintain our buy rating on the stock with a revised SOTP target price of Rs463,” says Angel Broking research report.

Institutional holding more than 40% in Indian cos

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