Analyst community took long to downgrade Tata Steel: Hemindra Hazari

In a chat with ET Now, market expert Hemindra Hazari shares his view on the steep cut in target price for Tata Steel by a foreign brokerage.

ET Now: What is your view on Tata Steel? The Street is raising eyebrows on the quantum of the downgrade and the kind of slash coming in the target price for the steelmaker ( CLSA has downgraded Tata Steel to 'Sell' from 'Buy' and has slashed the target price to Rs 290 from Rs 480 earlier). What is the rationale? Does it justify the concerns on Tata Steel?

Hemindra Hazari: Yes, the cut is justified because the company has been carrying on foreign acquisitions despite sitting on huge losses.

Tata Steel has finally started recognising such losses. We are rather surprised that analysts have taken so long to downgrade the stock because the steel industry is not doing well globally and we do not expected it to do well going ahead.

Therefore, this should have been factored in long time back. Most foreign acquisitions, corporate India has carried on with, have been unsuccessful. One has to pay the price for such things.