J.P. Morgan initiates coverage of Sesa Goa with an "overweight" rating and a September 2013 target price of Rs 240.
The investment bank cites the earnings prospect of Sesa Goa following its merger with Sterlite Industries , with "high quality" assets in zinc and earnings growth driven by oil.
"In our view post merger, the combined SESA STLT entity would offer investors best in class resource diversification with top quality assets in zinc and oil," J.P.Morgan says in the note dated Wednesday.
J.P.Morgan adds heavy capital spending is coming to an end, although a re-rating of the stock depends on the performance of its aluminum and power businesses, while coal "remains the missing part in the diversified portfolio."
Sesa Goa shares down 0.4 percent at Rs 171.70 as of 2.30 pm.