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CLSA gives 'buy' rating for Tata Steel, 'outperform' for JSW Steel

CLSA gives 'buy' rating for Tata Steel, 'outperform' for JSW Steel

CLSA gives 'buy' rating for Tata Steel, 'outperform' for JSW Steel
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By CNBCTV18.com Mar 30, 2021 3:03:15 PM IST (Published)

Brokerage firm CLSA maintained its 'buy' rating for Tata Steel and upgraded JSW Steel to 'outperform'.

Brokerage firm CLSA maintained its 'buy' rating for Tata Steel and upgraded JSW Steel to 'outperform'. The brokerage firm expects a further upside in steel stocks on the backs of favourable risk-reward ratio, despite its significant outperformance over the last year. CLSA has set a price target of Rs 950 for Tata Steel and Rs 490 for JSW Steel.

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CLSA expects “upward revisions in consensus as current estimates imply a Rs 10,000-12,000 per tonne correction in steel prices versus spot. As the domestic prices are trading at a 10 percent discount to import parity, such a sharp correction is unlikely unless demand drops sharply (not our base case)”.
China's focus on lowering emissions is likely to reduce production, and while its demand outlook is uncertain, supply cuts should support prices. The report states that the estimates for Indian steel companies are mainly on better realisations.
On March 26, JSW steel submitted an Expression of Interest (EoI) for Neelachal Ispat Nigam Limited, the public sector steelmaker in Odisha's Kalinga Nagar. Now, JSW Steel, Tata Steel, and ArcelorMittal Nippon Steel India in the race for Neelachal.
Tata Sons, the part-owner of Tata Steel has increased its stake in the company to 33 percent from 30 percent with the conversion of partly paid equity shares into fully-paid and acquisition of shares from the open market. Also acquired 1.55 crore equity shares from the open market on March 12 and 13.
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