Citi rates Tata Steel sell; price target Rs 125

MUMBAI: Tata Steel is a ���sell��� at Citigroup as it expects steel prices to weaken further amid a global economic slowdown. The investment bank expects Tata Steel's net profit to decline 60% in 2009-10 and 20% in 2010-11, as against their previous years, even after upgrading its consolidated net profit estimates in these two fiscals by 7-11%.

���We have revised our estimates for Tata Steel taking into account updated selling prices, US$/GBP rates, lower raw material prices, volume adjustments, and cost savings expected in Corus,��� Citi said in a report, while cutting the stock's price target to Rs 125 per share from Rs 130.

At 2:00 pm Tuesday, Tata Steel shares were among the biggest Sensex losers, down Rs 11.30 or 6.14% at Rs 172.75.

���The downturn in Europe has lagged the US economy and is well understood by investors. We think the likelihood of a recovery in 2009 is low,��� Citi said.

���Together with strengthening US$-based raw material costs Corus is under pressure to deliver in testing times. We believe Corus is more exposed to current weakness than Tata Steel in India,��� it added.