Steel Authority of India (SAIL) Ltd. share price target

Price hike not enough to get out of red; focus on cutting cost required SAIL's 4QFY16 LBITDA (negative EBITDA) of INR11.2b was higher than our estimate of INR3.2b (down from INR13.1b in 3Q) on 6% realization miss. Interest cost rose...

Steel Authority of India Ltd (SAIL) posted numbers, which were below our estimate. The company reported a third consecutive EBITDA loss which widened further in 3QFY16. Revenue at Rs89bn declined ~20% yoy and 3% qoq as against our estimate of Rs93bn. The company reported an EBITDA loss of Rs13.8bn (Our estimate loss of Rs10.3bn). PAT loss at Rs15.3bn was higher than our estimate of a loss of Rs12.9bn. This steep fall in PAT was due to EBITDA loss along with lower other income and increased interest costs on the back of capitalization of new facilities. Realizations at Rs30,825/tonne fell 21% yoy and 10% qoq, while EBITDA/tonne was at negative...

Steel Authority of India (Sail) reported a weak set of numbers for 2QFY2016 with a loss at the operating and net profit level. While volumes were in line with expectations at 2.74MT (estimate 2.75MT), blended realisations declined 15% yoy to Rs37,388/tonne as against our expectation of a 12% decline. Owing to a higher-than-expected drop in realisations, net sales declined 21% yoy to Rs9,113, 3% below our estimate. Operating expenses came in much higher than expectations, resulting in an EBITDA loss of Rs1,048cr as against our expectations of an EBITDA loss of Rs170cr. Material costs came in much ahead of our expectations at Rs4,065cr (44.6% of net sales) as against our expectations of Rs3,713cr (39.5% of revenues). Other expenses too were higher than expectations, resulting in a higher than expected EBITDA loss. Lower than expected depreciation and finance expenses and a higher than expected deferred tax credit resulted in a net loss of Rs1,056cr, nearly at par with the loss at the EBITDA level, as against our expectations of a net loss of Rs623cr. Outlook and valuation The stock is currently trading at a P/BV of 0.5x and 0.6x its FY2016E and FY2017E book value, respectively. Given the weak outlook on...

on pricing despite safeguard duty resulted in SAIL seeing operating losses for a second consecutivequarter.Lowerdemand,plantshutdown,andpricingpressuressawfinishedand semifinished inventory balloon (3.1mn tonnes vs. sales of 2.73mn tonnes). While the...

Steel Authority of India Ltd (SAIL) posted numbers, which were below our as well as street estimate on all counts. The company reported a second consecutive loss on the EBITDA front which widened further. Revenue at Rs93bn fell ~21% yoy and 3% qoq as against our estimate of Rs97bn. The company reported an EBITDA loss of Rs10.5bn (Rsec estimate loss of Rs1.2bn). PAT loss at Rs10.6bn was higher than our estimate of a loss of Rs4.8bn. This steep fall in PAT was due to EBITDA loss along with lower other income, higher depreciation and increased interest costs on the back of capitalization of new facilities. PBT loss was even higher at Rs18.2bn. Realizations at Rs34,285/...

Steel Authority of India Ltd (SAIL) posted numbers, which were below our as well as street estimates on all fronts. Revenues at Rs95bn fell ~16% yoy and 18% qoq as against our estimate of Rs102bn. The company reported an EBITDA loss of Rs817mn (Our estimate of a profit of Rs4bn). It must be noted that loss at the EBITDA level was the first in over a decade. PAT loss at Rs3.2bn was higher than our estimate of a loss of Rs2bn. This steep fall in PAT was due to EBITDA loss along with lower other income, higher depreciation and increased interest costs on the back of capitalization of new facilities. PBT loss was even higher at Rs7.8bn. Realizations at Rs35,313/tonne fell 14% yoy and 4% qoq,...