PINC recommends 'buy' on Tata Steel with a target of Rs 690

MUMBAI: PINC has recommended ‘Buy’ rating on Tata Steel with a price target of Rs 690 per share.

“Although we expect Tata Steel’s profitability in Q2 to be under pressure, we believe that the worst is behind. We are positive on the stock given 1) highly profitable Indian operation, 2) volume growth led by 2.9mntpa capacity expected in FY12, 3) Corus turnaround – Improved capacity utilisation and leaner cost structure and 4) Partial resource integration in Corus with captive coking coal and iron ore expected by FY12.

At 4.4x FY12E EV/EBITDA, the stock is attractively valued. We recommend ‘BUY’ with a target price of Rs 690 per share,” the report said.