Tata Steel: Has To Sustain Above 340-370-385 For Any Further Rally Despite Improved Q4 EBITDA; Huge Debt & UK Pension Liability May Hurt

Trading Idea: Tata Steel

CMP: 325

Either sell around 330-340-350 or on rise around 375-385;

TGT: 305*-287-260-240*-220-210*-199-185 (1-3/6M)

TSL> 365-395

Note: Consecutive closing (3 days) above 395 for any reason, Tata Steel may further rally up to 418*-445-480 & 500-535-580 in the near to long term (alternative bullish case scenario).

For Tata Steel (Standalone):

Q4FY16 TTM EPS: 48.67 (FY:16/Actual)

Projected FWD EPS: 37.50-43.12-49.65 (FY:17-19/Estimated)

(**Q2 & Q1FY16 higher EPS was supported by one time exceptional other income)

Average PE: 6 (until steel demand supply dynamics improved significantly and headwinds of UK asset sales/pension liability & huge debt headwinds are over despite MIP support).

As par BG metrics and current market parameters:

Present median value may be around: 300 (FY:16/TTM)

Projected fair value might be around: 265-285-305 (FY:17-19/FWD)

TATASTEEL	EPS	BV	P/E	Low	High	Median	200-DEMA	10-DEMA
Q4FY16/TTM	48.67	751.6	6	291.83	307.74	299.79	291.65	324.31
FY17/FWD	37.5	823.05	6	256.17	270.13	263.15	291.65	324.31
FY18/FWD	43.12	901.95	6	274.69	289.66	282.18	291.65	324.31
FY19/FWD	49.65	986.85	6	294.76	310.82	302.79	291.65	324.31

Analytical Charts: