Bullish on steel players, Tata Steel top pick: Harendra Kumar

In a chat with ET Now, Harendra Kumar, Managing Director-Institutional Equities, Elara Capital shares his views on the metal pack and in particular, Tata Steel and Hindalco. Excerpts:

ET Now: How would you trade the base metal stocks, based on the view on commodities, because the likes of Sesa Sterlite or a Hindalco, have not set the stage on fire but have done reasonably well?

Harendra Kumar: As far as the ferrous players are concerned, they are going to see the benefit of rupee depreciation and their prices will hold up if the rupee depreciates.

However, there is a sharp correction in iron ore and one would anticipate that to actually flow through to the steel manufacturers. So all in all, we believe that the steel players will continue to hold their position and do well. In fact, there is a lot of positive news flow on Tata Steel, in terms of their EBITDA per tonne and even in Corus.

So there is more steam left for Tata Steel, even at this juncture. We are not so positive on Hindalco and some of the other names and our top pick remains Tata Steel at this point of time.