See bigger rally in Tata Steel on European steel demand rise: Manish Sonthalia

In a chat with ET Now, Manish Sonthalia, Sr VP & Head-Equities PMS, Motilal Oswal Asset Management-PMS shares his view on Tata Steel. Excerpts:

ET Now: What is it that you are expecting from Tata Steel because especially after ArcelorMittal’s earnings, people anticipating a great set for the European business of Tata Steel?

Manish Sonthalia: 3600 crore worth of EBITDA is what the normal projections are. ArcelorMittal has now suggested that the second half of this year should be better than the first half.

Normal street projections for European operations are $25 EBITDA, but they may do better than that because they do not manufacture a low grade steel out there and it is value added steel that they manufacture and given by the commentary coming out of ArcelorMittal the $25 EBITDA per tonne could be breached on the upside and the commentary surrounding the second half being better means that there is some sort of a floor for Tata Steel.

European steel demand is now looking to pick up, scrap prices are starting to move up in China. China after a hiatus of three months, steel prices have started to look up. So combined all these things Tata Steel can do even better.