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[Lavanay]

[Dow Jones]

Morgan Stanley rates Indian steel sector as Attractive, keeps Overweight ratings on JSW Steel, Tata Steel (500470.BY) and SAIL (500113.BY). "Rising steel prices, high self-sufficiency in raw materials, improving product mix and gains from cost reduction initiatives should aid large Indian steel makers in expanding EBITDA margins in FY09 and FY10." MS adds three aforementioned steel stocks still trading at discounts to global peers.

Anticipates steel price hikes of more than 10% in India and Europe in the next six months. MS sets Tata Steel target at INR1112 vs current INR736.05, up 1.4% in early trade. Sets JSW Steel target at INR1569 vs current INR1105, up 0.5%. Sets SAIL target at INR305 vs current INR191.60, up 3.1%.