Morgan Stanley retains ‘underweight’ on Tata Steel

Morgan Stanley has retained its ‘underweight’ rating on Tata Steel, following the fourth quarter numbers, which the brokerage house termed as “disappointing”. “We liked the company’s clean-up efforts at taking large inventory write-down and restructuring costs in the quarter.

We believe that Q409 (January-March 2009) will turn out to be the earnings bottom for Tata Steel, although a rebound will depend on the pace of restructuring at Corus and steel prices in Europe,” said the Morgan Stanley note to clients.

“While the steel stock sentiment has improved and extremely stressful scenarios for steel companies may no longer be relevant for these stocks, Tata shares could see some short-term pressure due to the poor Q409 result,” the note added.

Source: http://economictimes.indiatimes.com/ViewsRecommendations/Morgan-Stanley-retains-underweight-on-Tata-Steel/articleshow/4708553.cms

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