Target of 560 for Tata Steel: Sunil Shah

ET Now spoke to Sunil Shah, Director Equities, Indsec Securities & Finance Ltd, on his views on stocks.

ET Now: Do you like Tata Steel at current levels?

Sunil Shah: Tata Steel, the kind of things that the company is doing and as we are talking about right now in terms of hiving off the businesses, that will help the parent company to collect huge amount of equity flows.

Right now Tata Steel is really strained in terms of the debt equity, the debt that it had taken to do the Corus acquisition. In fact on a standalone basis itself, the debt in the company is in excess of almost about $4.5-5 billion.

That's too much of money and if they are able to divest all these businesses and recoup the money, that should help to reduce the debt burden. Even on the numbers, which came in yesterday, the interest outflow has reduced to close to about 600 crores on a year on year basis from about 800 crores in the last year but this kind of moves will really help in terms of mitigating the liabilities of the company going forward and reduce the interest burden.

So apart from the changes, which could happen on the commodity price front, the positive thing would be the financial restructuring, which is happening in the company and that should help the perk up in the stock even in the near term for sure. So from this price, we see a little bit of upside clearly on the stock and should get a trading target of about 560 thereabout for Tata Steel in near term, that's what we can believe so.