Angel Broking has maintained 'Accumulate' on Sesa Sterlite with target price of Rs 228 in its report.
The supreme court has lifted mining ban in Goa with some pre-conditions. The iron ore mining will be restricted to a capacity of 20 million tons annually. Resumption of iron ore mining is positive for Sesa Sterlite as it had mined 14 million tons from Goa during FY2011, although the new capacity is likely to be much lower.
Commenting on the investment rationale, the stock broker said, "However, we believe the eventual start-up of production is likely to take its own time due to regulatory hurdles as witnessed in Karnataka. We expect meaningful production from FY2016. Also, since Goan ore is mainly used for exports, it is unlikely to have any material impact on domestic iron ore pricing. We await further clarity from Sesa Sterlite.
Until then, we maintain our estimates and Accumulate rating on the stock with a target price of Rs 228.''
Shares of the company declined Rs 6.1, or 3.02%, to trade at Rs 195.70. The total volume of shares traded was 762,214 at the BSE (12.07 p.m., Tuesday).
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