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

Revenue grew by 13.63% to Rs. 12690.54 Cr in Q4FY17 when compared to the previous quarter Revenue grew by 13.63% to Rs. 12690.54 Cr in Q4FY17 when compared to the previous quarter

SAIL reported a subdued Q4FY17. The company reported a loss at the EBITDA level on account of elevated operating costs Sales volumes during the quarter came in at 3.45 million tonne (MT), down 9.2% YoY, up 4.5% QoQ broadly in line with our estimate of 3.4 MT. Gross revenues came in at | 14234.18 crore. After adjusting for excise, net revenues were at | 12690.5 crore, up 11.7% YoY, 12.3% QoQ, broadly in line with our estimate of | 12390.1 crore The company reported an EBITDA loss of | 264.4 crore against our...

Despite higher-than-expected exports, Steel Authority of India (SAIL) has reported largely inline numbers in 4QFY17 with its sales volume coming in at 3.45mnT vs. our estimate 3.6mnT. Its reported EBITDA/tonne loss stood at Rs767 vis--vis our estimate of Rs1,100 (loss) largely due to lower employee cost. Due to lower base with Voluntary Retirement Scheme (VRS) and usual superannuation of employees, SAIL's staff cost surprisingly declined by 13.3% YoY and 15% QoQ to Rs6,039/tonne. Realization rose by 23% YoY and 8% QoQ to Rs36,827/tonne (vs. our estimate of Rs36,437) due to higher share of value-added products in overall sales-mix. Looking ahead, though we expect SAIL to start reporting stronger numbers, it seems to have been priced in. Rolling over our estimates to FY19E, we upgrade our recommendation on...

Revenue grew by 0.81% to Rs. 11168.73 Cr in Q3FY17 when compared to the previous quarter. Also, it rose by 26.84% when compared with Q3FY16.

ICICI Securities Ltd | Retail Equity Research SAIL's Q3FY17 numbers were above our estimates. The better-thanexpected performance was primarily driven by higher-than-expected realisations. Blended realisations increased ~10% QoQ, higher than our expectation of an increase of ~7% Sales volumes during the quarter came in at 3.3 million tonne (MT), up 13.8% YoY, down 8.3% QoQ marginally higher estimate of 3.2 MT. Gross revenues were at | 12619.7 crore. After adjusting for excise, net revenues were at | 11298.2 crore, up 26.4% YoY, 0.6% QoQ and...

Higher Raw Material Cost & Lower Volume Dent Margins Steel Authority of India (SAIL) has reported largely in-line numbers in 3QFY17 with sales volume at 3.3mnT as expected, despite higher-than-expected exports. It posted an EBITDA/tonne loss of Rs130 (lower than our estimate of Rs185 loss) with the usage of domestic coking coal rising to 20% in 3QFY17 from 14% in 3QFY16. Further, lowcost coking coal inventory led to decline in average cost of coking coal to Rs13,195/ tonne vs. international comparative cost of ~Rs 15,000/tonne assuming the same blend. Realization rose by 11% YoY and 9% QoQ to Rs34,237/tonne (vs. our estimate of Rs34,747) due to higher share of exports in the overall sales-mix. However, with an...

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...

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.

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...