CLSA is of the opinion of a rerating of Indian steel stocks. Confirmation of anti-dumping duties for the next four years has put a floor to Indian steel prices. Indian steel demand-supply is on the cusp of a multi-year tightening phase given lack of new capacity
additions.
Steel demand outlook is also improving with the government's affordable housing program and likely start of an investment cycle by
FY19. CLSA see potential for Indian steel valuation multiples to rerate.
It has the following recommendations,
BUY
Vedanta TP: Rs340 Upside: 45.7%
Tata Steel TP: Rs710 Upside: 44.9%
JSW Steel TP: Rs300 Upside: 53.6%
