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

Volumes surprise positively; Lower costs save the day Steel Authority of India Ltd (SAIL) reported decent numbers during the quarter under review. Sales volume at 3.56mn tonnes was considerably higher than our estimate of 2.9mn tonnes, largely due to higher exports. The company posted an EBITDA/tonne of Rs313 (our estimate loss of Rs368), the same was largely aided by adoption of IND-AS, which led to downward revision of many costs due to capitalization effect. Realization at Rs31,497/tonne fell 8% yoy and 5% qoq and was only marginally lower than our estimate of Rs31,843. EBITDA at Rs1.1bbn was aided by lower costs. SAIL reported an adjusted...

Dismal Show Continues; IND-AS Saved the Day Steel Authority of India Ltd. (SAIL) once again reported subpar numbers both on volume and realization fronts. Its EBITDA/tonne at Rs835 (vs. our estimated loss of Rs1,033), was largely aided by adoption of IND-AS, which led to downward revision of several costs owing to capitalization effect. Its sales volume rose by 4% yoy to 2.8mnT (-down 26% qoq) lower than our estimate of 3mnT. In contrast, its realization at Rs32,993/tonne fell 6.2% yoy (+10% qoq), marginally higher than our estimate of Rs32,679. Aided by lower costs, its EBITDA surged 164% yoy to Rs2.4bn post revision of 1QFY16 numbers...

SAIL reported a better-than-expected operational performance. The company reported a healthy EBITDA primarily on the back of higherthan-expected realisations and lower operating cost per tonne .The sales volume came in at 2.8 million tonnes (MT), up 3.7% YoY, down 26.3% QoQ and lower than our estimate of 3.2 MT. Subsequently, total operating income came in at | 9238.1 crore, down 2.7% YoY, 18.8% QoQ and lower than our estimate of | 10465.7 crore. Sales realisation in the quarter was at | 32437/tonne, up 8.4% QoQ. A significant operational performance at the Bokaro Steel plant registering a PBIT of | 55 crore against heavy losses both YoY, QoQ has been a key highlight of the turnaround achieved during the quarter. The company reported a healthy EBITDA of | 233.8 crore against losses both YoY and QoQ (significantly higher than our estimate of | 81.3 crore). The resultant EBITDA/tonne came in at | 835/tonne notably higher than our estimate of | 250/tonne. The better-thanexpected operating performance was primarily driven by healthy realisations and lower operating cost per tonne, which fell 9.4% YoY and 2.2% QoQ. The company reported a net loss of | 535.5 crore, which broadly came in line with our estimate of | 554 crore.

The company reported a better-than-expected operational performance on account of healthy realisation and lower operating costs. Going forward, we have maintained both sales volume and EBITDA/tonne estimates for FY17E and FY18E. We have valued the stock at 6.5x FY18E EV/EBITDA (from earlier 6x) given the turnaround at the EBITDA level after a few quarters and arrived at a target price of | 45. They have upgraded our recommendation on the stock to HOLD.

Volumes at record high; lower realization drags performance Despite sales volume being at the highest level recorded in any quarter, the quarterly numbers of Steel Authority of India (SAIL) came below our estimate. It has reported EBITDA loss for the fourth time in a row, but contracted sequentially due to higher volumes. Its revenue declined ~2% yoy (+27% qoq) to Rs114bn in 4QFY16 beating our estimate of Rs109bn, due to higher sales volume at 3.8mnT (up 20% yoy & 31% qoq) v/s our estimate of 3.35 mnT. SAIL posted an EBITDA loss of Rs11.2bn (v/s our estimate Rs4.3bn loss) and incurred Rs12.3bn net loss (v/s our estimate of Rs8.7bn loss)...

ICICI Securities Ltd | Retail Equity Research SAIL reported a dismal set of Q4FY16 numbers wherein the EBITDA and bottomline came in notably lower than our estimate, primarily on...

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...