We recommend Sesa Goa Ltd. to sell at current level with a target price of Rs 154 for intraday trading tomorrow 04-Jan 2012.
Government of India has notified increase in export duty from 20% to 30% on iron ore fines and lumps. The hike will be effective December 30, 2011 and would impact Sesa Goa and NMDC adversely. Govt has last increased the duty from 5% to 20% in the Union budget 2011-12 affecting the industry adversely. This increase in export duty would reduce the effective realizations for the iron ore miners by 10% (in case of domestic sales) or increase the cost by the similar amount in the case of exports.
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