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Tata Steel: Compelling valuations
> The stock trades at 1.4X FY2012E P/B, in line with the sector avg. despite sector leading FY12E ROE of 19% (sector
ROE: 12%)
> On earnings-based multiples, the stock is trading at 5.3X FY12E EV/EBITDA, at 15% discount to mid-cycle of 6.2X
peers
Valuation scenario analysis implies a low multiple for Tata Steel’s Europe business
Tata Steel’s strong growth trajectory (42% FY10-FY13E EBITDA CAGR) and improving return profile, driven by
robust profitability at India operations (71% of FY11 EBITDA) and sustainable recovery at Tata Steel Europe
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tata Steel: Compelling valuations
> The stock trades at 1.4X FY2012E P/B, in line with the sector avg. despite sector leading FY12E ROE of 19% (sector
ROE: 12%)
> On earnings-based multiples, the stock is trading at 5.3X FY12E EV/EBITDA, at 15% discount to mid-cycle of 6.2X
peers
Valuation scenario analysis implies a low multiple for Tata Steel’s Europe business
Tata Steel’s strong growth trajectory (42% FY10-FY13E EBITDA CAGR) and improving return profile, driven by
robust profitability at India operations (71% of FY11 EBITDA) and sustainable recovery at Tata Steel Europe
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