Alpha Ideas 20-20 | Why Sanjeev Pandiya Considers Tata Steel A Value Pick
A strong promoter, a self-sustaining European business and visible deleveraging make Tata Steel Ltd. an attractive bet for value investor Sanjeev Pandiya.
“Tata Steel is a defensive story which has the potential to be a multi-bagger stock,” he said on the sidelines of Alpha Ideas 20-20 event in Mumbai. Tata Steel, Pandiya said, is the cheapest stock among steelmakers across the world, and is a value buy at this point since prices don’t factor in the potential profitability of the company. He expects Tata Steel to be a zero-debt company by 2025.
Adopting a top-down approach, Pandiya opted for Tata Steel as it’s an “obvious beneficiary” given the higher demand for steel in the country. He said 68 percent of future incremental global demand will come to India, where urbanisation stands at 34 percent versus 80 percent in Japan and the U.S.
- No protection from currency depreciation
- No improvement in global realisations
- Clearly in mid-cycle
- Chinese capacity will stagnate
- Global growth: flat to rising. India at average 6 percent
- No global meltdown
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