Tata Steel @ 438 for a target of Rs 415

by khalid on 04/07/2009 · 0 comments

JP Morgan India has assigned a ‘neutral’ rating to Tata Steel with a price target of Rs 415, saying that while the worst was behind, near term challenges remained. “While June and September 2009 quarters should be weak, we believe the worst is behind in terms of operational environment for Corus.

While the current capacity utilisation at Corus remains at 50%, we expect utilisation levels to gradually increase from here,” said a JP Morgan note to clients. “Indian operations should continue to do well and provide strong cash flow support over the next 12-18 months as Corus restructures. While deleveraging is expected to be limited over the next 18 months, it should pick up pace once Corus’ earnings normalise,” the note added.

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