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Tata Steel an underperformer: Karvy
Karvy Stock Broking has maintained its underperformer rating on Tata Steel with a target price of Rs 595. Corus has increased the HR coil price per tonne from £500 to £730 in the last six months.
Karvy Stock Broking has maintained its underperformer rating on Tata Steel with a target price of Rs 595 in its June 30, 2008 research report. "Corus has increased the HR coil price per tonne from £500 to £730 in the last six months. However, the increase is just sufficient to meet the cost push impact estimated at £5.5 billion due to the hike in iron ore and coking coal prices."
"We believe that the future increase in steel price may not be sufficient for offsetting any further increase in raw material prices. As a result, the non-integrated operations of Corus are at a significant risk. Hence, even after upgrading the target price based on better outlook for stand alone numbers, we retain UNDERPERFORMER rating on the stock with target price of Rs 595," says Karvy's research report.
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