The bull hypothesis is based on 4 variables going right independently. As one variable has 0.003% probability, we can say the risk-reward is unfavourable. The Indian steel price is 20% below import parity, but domestic steel price rise is unlikely as 25% price rise will lead to over 1% increase in already high WPI. We adjust our price targets to account for extra cash generated in two quarters and maintain our sector rating at Underweight. Maintain Reduce on Tata Steel.
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