Morgan Stanley, Citi positive on Tata Steel

The company offers a good restructuring story due to rising capacity, improved sales volumes

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Reuters
Last Updated : Jan 30 2013 | 12:36 PM IST

Citigroup says oversupply in China and Europe leaves little room for upside in steel prices, after global re-stocking sparked a rally over the past three months. However, the bank retains a 'buy' rating on Tata Steel Ltd and raises its target price to Rs 508 from Rs 430, citing "inexpensive" valuations, a bottoming out of earnings in Tata Steel Europe and more resilient volumes than other Indian steel makers.

Separately, Morgan Stanley adds Tata Steel to its Asia-Pacific excluding Japan as well as Emerging Markets focus lists, saying the company offers "a good restructuring story" due to rising capacity, improved sales volumes and the commissioning of a new coke oven battery.

Citigroup also downgraded Steel Authority of India Ltd to 'sell' from 'neutral' after the stock gained over 12% in past three months, already discounting expectations of margin improvement in fiscal 2014.

Tata Steel shares gain 1.2%, while SAIL shares are up 0.4%.

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First Published: Jan 30 2013 | 12:36 PM IST

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