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Stocks of metal companies are seen rising after significant corrections in past few weeks, and are expected to see some respite. We believe a rise in international metal prices will help domestic stocks rebound. We can expect a rally of around 5-10% in metal stocks in the short term. It has maintained a negative outlook on Tata Steel due to its higher-than-expected net financial leverage in the financial year 2012-13, together with uncertainty regarding de-leveraging in the near term. TSL intends to manage its debt levels through internal accruals, divestments of assets and phasing out of capex. The company is close to selling its 25-acre property at Borivali, valued at around 10 bln rupees, which will help reduce its debt, which as on Sep 30 stood at 643.34 bln rupees. Negative on the operational performance of the company too. Ind-Ra expects the profitability to remain under pressure in the near term with slower volume growth in Europe and lower growth trajectory in the Indian markets.
Stocks of metal companies are seen rising after significant corrections in past few weeks, and are expected to see some respite. We believe a rise in international metal prices will help domestic stocks rebound. We can expect a rally of around 5-10% in metal stocks in the short term. It has maintained a negative outlook on Tata Steel due to its higher-than-expected net financial leverage in the financial year 2012-13, together with uncertainty regarding de-leveraging in the near term. TSL intends to manage its debt levels through internal accruals, divestments of assets and phasing out of capex. The company is close to selling its 25-acre property at Borivali, valued at around 10 bln rupees, which will help reduce its debt, which as on Sep 30 stood at 643.34 bln rupees. Negative on the operational performance of the company too. Ind-Ra expects the profitability to remain under pressure in the near term with slower volume growth in Europe and lower growth trajectory in the Indian markets.
