BNP Paribas downgrades JSW Steel on valuations

Says with rupee at 60-62 levels, exports don't look as attractive

BNP Paribas downgraded JSW Steel Ltd to "reduce" from "hold", citing expensive valuations after recent outperformance due to a delay in the US Federal Reserve's tapering of monetary stimulus in September.

The investment bank said checks with steel producers and traders suggested that the benefits of a weak currency are neutralised when the rupee is around 60-62 to the dollar.

"With the INR hovering at these levels, a sharp recovery in imports is unlikely and the export opportunity no longer looks as attractive," BNP Paribas said in a report.

BNP Paribas maintains its "hold" on Tata Steel Ltd and Steel Authority of India Ltd .

 

JSW Steel fell nearly 1%, while Tata Steel is up 1.34% and SAIL is down 0.38% at 11:02 am.