Nomura upgrades Tata Steel to 'buy'
Nomura has upgraded the stock to 'buy' from 'reduce' with a price target of Rs 591, citing a revival in fortunes at Corus led by an improved steel outlook in Europe.
By ET Bureau |
CMP: Rs 458.15
Target price: Rs 591
Nomura has upgraded the stock to ���buy��� from ���reduce��� with a price target of Rs 591, citing a revival in fortunes at Corus led by an improved steel outlook in Europe.
���We believe Tata steel will be one of the largest beneficiaries of the improving economic environment globally, owing to its presence in the European markets through Corus. While higher steel prices should improve the profitability of Corus, we believe the greater impact will come from the improving capacity utilisation rate,��� the brokerage said in a note to its clients.
Nomura analysts have estimated Corus��� enterprise value at $6.2 billion and the Indian business at $14.9 billion.
���Corus had been a major overhang for the company due to higher costs, high debt, low steel prices and a lower capacity utilisation rate. However, we expect Corus to see significant improvement in the operating environment and Tata Steel���s India business remaining strong and continuing to grow with intact capacity expansion plans. We believe Tata steel will see significant earnings growth during FY10-12E, improving profitability and easing balance sheet issues, and this should support the stock price,��� the note said.
Target price: Rs 591
Nomura has upgraded the stock to ���buy��� from ���reduce��� with a price target of Rs 591, citing a revival in fortunes at Corus led by an improved steel outlook in Europe.
���We believe Tata steel will be one of the largest beneficiaries of the improving economic environment globally, owing to its presence in the European markets through Corus. While higher steel prices should improve the profitability of Corus, we believe the greater impact will come from the improving capacity utilisation rate,��� the brokerage said in a note to its clients.
Nomura analysts have estimated Corus��� enterprise value at $6.2 billion and the Indian business at $14.9 billion.
���Corus had been a major overhang for the company due to higher costs, high debt, low steel prices and a lower capacity utilisation rate. However, we expect Corus to see significant improvement in the operating environment and Tata Steel���s India business remaining strong and continuing to grow with intact capacity expansion plans. We believe Tata steel will see significant earnings growth during FY10-12E, improving profitability and easing balance sheet issues, and this should support the stock price,��� the note said.
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