Cairo - Mubasher: Pharos Research initiated its coverage on Al Ezz Dekheila Steel with an "Overweight" recommendation and on Ezz Steel with an "Underweight" recommendation, according to a report issued on Monday.

The research firm also set the FV for Al Ezz Dekheila Steel and Ezz Steel at EGP 600 and EGP 14 respectively.

Al Ezz Dekheila’s net debt (EGP 12.036 billion) is less than that of Ezz Steel’s (EGP 17.948 billion) taking into account foreign debt revaluation.

Al Ezz Dekheila also owns 44% in loss making EFS, while Ezz Steel owns directly and indirectly 71% in EFS.

“The main downside risks to our valuation are natural gas shortage re-emergence, holding back utilization rates recovery, and/or inability to finance working capital requirements,” the report indicated