Tata Steel - Rating: Sell; Target Price: Rs310 - Centrum

- We expect consolidated revenue of ~Rs331bn, up 4.2% YoY. We expect sales volumes of ~2 MT in India (flat QoQ) and 3.3 MT in Europe (muted on account of low demand in India and seasonal factors in Europe).

- We expect consolidated EBITDA margin of 10.8%, higher YoY by 377 bps and marginally higher by 62bps QoQ. We expect European operations to witness a marginal drop in EBITDA/t to US$20 (from US$26/t in Q2) on account of lower volumes. EBITDA/tonne is expected to be higher by 2.3% QoQ in Indian operations on account of better realizations. Cons. EBITDA at Rs35.8bn is expected to be lower by 3.3% QoQ.

- Consolidated adj-PAT is expected to be ~Rs3.4bn, subdued on account of higher interest and depreciation costs and lower other income on a QoQ basis.

Source : Equity Bulls

Keywords