Reliance Money has recommended a sell rating on Tata Steel with a price target of Rs 146 in its March 17, 2009 research report.
“Tata Steel (Consolidated) declared better than expected Q309 results. Tata Steel (Consolidated) posted net sales of Rs 331.9 billion (up 4% (YoY), an EBIDTA of Rs 28.6 billion (YoY reduction of 27.5%) and PAT of Rs 7.3 billion (decline of 48% (YoY)). The EBIDTA margins for Q309 were 8.6%- a YoY correction of 375 bps. Tata Steel (Indian Operations) reported a PAT of Rs 4.7 billion (decline of 56% (YoY)) with decline in realization USD 924/tonne (YoY cut by 1.3%). We recommend a ‘SELL’ on the stock considering the weak demand and high leverage of the company, with a price target of Rs 146 at which it would trade at a EV/EBIDTA of 4.6x on FY10E,” says Reliance Money’s research report.
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