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Buy Tata Steel, target of Rs 977: Religare
Religare Research has recommended a buy rating on Tata Steel with a target price of Rs 977. Steady uptrend in European spot steel prices coupled with strategic initiatives taken to secure feedstock linkages will sustain Tata Steel’s growth momentum.
Religare Research has recommended a buy rating on Tata Steel with a target price of Rs 977 in its June 16, 2008 research report. "Steady uptrend in European spot steel prices coupled with strategic initiatives taken to secure feedstock linkages will sustain Tata Steel's growth momentum. With successful commissioning of the 2.5mtpa hot metal capacity, the company is on track to reach 7mtpa by FY09, providing volume growth in Indian operations.Further upside potential to estimates from our conservative projections for European steel prices and increasing synergy benefits plus ongoing cost reduction programmes at Corus."
"Available at a discount of 15% to European peers. Our target price of Rs 977 values the company at an average of 7x EV/EBITDA and 8x P/E on FY10E," says Religare's research report.
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