UBS downgrades Tata Steel to 'neutral'

Mumbai: UBS has downgraded Tata Steel to 'neutral' from 'buy' and cut the price target by nearly half as it expects a decline in earnings and does not expect a recovery in the company's European operations, mainly Corus.

[caption id="attachment_103227" align="alignleft" width="380" caption="The Swiss bank has cut the price target to Rs 460 from Rs 860. Reuters"][/caption]

The Swiss bank has cut the price target to Rs 460 from Rs 860, citing lower steel prices and higher raw material costs.

"We believe Tata Steel's stock price is not attractive at the current levels," UBS said in a note to its clients.

Given limited visibility in macro recovery in near-medium term in Europe, Corus will remain an overhang given its high financial leverage and high cost structure, UBS added.