Gross Domestic Product – Q1FY12 Update

Dear investors,

India's economy grew at its slowest pace during the April-June quarter, as rising interest rates crimped the consumption and investment demand in economy. The slower performance in mining and quarrying, manufacturing and construction sector led to deceleration in the GDP growth to 7.7% from 7.8% in Q4FY11 & 9.3% in Q1FY11...

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Outlook on TATA Steel

TATA Steel Ltd - Q1FY12 Result Highlights

TATA Steel Ltd (TATA) reported its first quarter consolidated results for FY12 and has registered a net sales growth of 21.6% YoY to INR 328,399 mn which was ~9% above our estimates.

Outlook and Valuations

At CMP the stock is available at EV/EBITDA of 4.8x its FY13e and PE multiple of 6x of its FY13e earnings. Considering the expansion plan and the demand scenario, we believe that the company has potential for improved performance. We recommend BUY on the stock and maintain our price target of INR 690.

Click here for the full Q1FY12 report.