Sumit Bilgaiyan
Tata Steel plans to double its existing domestic capacity in the next 5 years through a mix of organically like debottlenecking Kalinganagar plant for 5mmtpa and Jamshedpur for ~1mmtpa.
It’s acquisition of both Bhushan assets under IBC will also add inorganic capex. Tata Steel is banking upon limited capacity addition and strong demand growth in India. India’s steel demand has remained strong over the last few quarters with 5 percent+ growth in the past 8 months.
We believe Tata Steel is an ideal play on the domestic steel growth story, with the acquisition of Bhushan Steel is expected to provide volume growth in the near term. We are recommending a buy.
Disclaimer: The author is founder & CEO of Equity99. The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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