Name: Latest research reports of Steel Authority of India (SAIL) Ltd. authored by Motilal Oswal and published by - Trendlyne research reports.
Item: Steel Authority of India (SAIL) Ltd.
Rating: 3
Author: Motilal Oswal

Op. performance continues improving led by demand tailwind

Neutral: Steel Authority of India (...

Recommendation Target

Motilal Oswal

31 May 2018 SAILs operating performance continues improving, driven by the tailwind of strong demand and significantly better steel prices. 4QFY18 EBITDA increased 68% QoQ to INR26b (20% beat), driven by higher steel prices (+12%; 6% beat), partially offset by increased other operating expenses. EBITDA per ton increased 69% YoY to INR6,945. Interest and depreciation, too, increased due to capitalization of projects. INR5.8b provision toward an increase in cap on gratuity had a negative impact and INR3.3b w/back had a positive impact on the wage bill and PAT. Adj. PAT increased 3x QoQ to INR6b. EBITDA was INR52b (v/s INR380m in FY17) and adj. loss before tax reduced from INR27b to INR1.3b. Net debt increased by INR40b, while capex stood at INR51b for the full year. SAIL has done a commendable job in containing the wage bill from ballooning.