ENAM Neutral on Tata Steel
Tuesday, September 04, 2007ENAM India Research has maintained a neutral rating on the prospects of Tata Steel with a price target of Rs 657 because of the short term challenges the company is facing rather than the long term gains.
- Equity raising and capacity expansion are the key to future success of Tata Steel
- Higher interest costs on bridge debt financing
- Tax inefficiencies for one of the SPVs (Tata Steel Asia)
- Improving margin by enhancing integrated operations in India
year. Coking coal - prices are expected to move higher next year.
Key risks include financial leverage and low operating margin. Thus maintain a NEUTRAL rating on the stock.
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