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Steel Authority of India
SAIL: Buy
Posted by :
latikavTracked by: 0 Boarder
SAIL’s ongoing capacity expansion programme, backward integration to source iron ore and its wide product mix and distribution reach favour investment in the stock.
Investors can consider buying the SAIL India stock, now trading at a price-earnings multiple of about 8.2 times its 2007-08 earnings. The valuation is at a discount compared to Tata Steel (9.4 times) and global steel majors. SAIL’s ongoing capacity expansion programme, backward integration to source iron ore and its wide product mix and distribution reach, amid a good long-term demand environment for steel, favour investment in the stock.
Business Overview
SAIL has five integrated steel plants at Bhilai, Durgapur, Bokaro, Rourkela and Burnpur and special steel plants as well. SAIL’s production capacity of 14 million tonnes (MT) is slated to increase to 26 MT by 2010-11, due to ongoing greenfield and brownfield expansion projects. The expansion plan is expected to address technology obsolescence, achieve energy savings and enrich the product-mix, while addressing the expected global deficit in steel.
The programmes entail an investment of Rs 54,000 crore (factoring in recent cost overruns). The financing is to be done in such a manner that SAIL’s debt-equity ratio remains within 1:1. The total capex for 2007-08 was Rs 2,181 crore and the estimated capex for 2008-09 is Rs 5,000 crore.
These requirements may not impose any fresh borrowings on SAIL in the current high interest cost environment, given the comfortable cash position and internal accruals. The debt-equity ratio has fallen from 0.18 in FY-07 to 0.11 in the latest June quarter, as internal accruals were used to steadily reduce borrowings. This suggests room for the balance-sheet for future leveraging.
Integration moves
On the inputs front, as of now, the company’s captive iron ore mines feed its entire requirements and SAIL plans to expand its existing mines to meet the rising demand for iron ore as output grows.
Its current mining capacity is 26 MT and it will need 43 MT by the end of 2009-10. The iron ore linkages for FY-2010 and beyond would come from the mines in Raoghat, Chiria, Taldih and Thakurani, apart from the existing mines.
Linkages have been formulated between each of SAIL’s plants and specific mines, with plans put in motion for the development of the mines. It has envisaged a Rs 13,000-15,000-crore brownfield expansion programme in the next eight years.
As regards coal, the current import component of 70 per cent (out of which 80 per cent is through long-term contracts from Australia, New Zealand and US and 20 per cent from spot market) is slated to increase from 2010 onwards. Further, the long-term component is likely to go up to 90 per cent from FY-09, which may shield margins to a greater extent from short-term spikes in price.
SAIL has also seen a significant improvement in its operating efficiencies with reductions in coke and fuel rates and energy consumption.
Product mix
The company is focusing on improving its product mix by increasing the proportion of value-added products. The production of value-added products has increased from 1.26 MT (2005-06) to 3.36 MT (2007-08).
The hot-rolled (HR) coils constitute 24.1 per cent, plates 21.2 per cent and semis 17.9 per cent of the sales mix for the year ended 2007-08. The proportion of rounds/bars is slated to increase from 10.2 per cent to 23.3 per cent, structurals from 5.2 per cent to 15 per cent and cold-rolled coils from 8.7 per cent to 10.4 per cent by 2010-11.
This has been accompanied by an expansion in the dealer network, from 653 in March 2007 to 1801 in June 2008.
Financials
SAIL’s net sales registered a Compounded Annual Growth Rate (CAGR) of 16.95 per cent over a four year period coinciding with the upturn in the commodity cycle.
Net profits witnessed a better CAGR of 31.6 per cent during the same period. In the latest June quarter, SAIL’s operating profit margins suffered a setback on account of wage revisions and higher raw material costs. SAIL appears more vulnerable to constraints on domestic steel prices than Tata Steel, which has a globally diversified presence. Domestic steel producers, who agreed to a moratorium on prices in May for three months, have once again acceded to holding the price line in August.
Despite this, SAIL clocked strong Q1 numbers, which can be attributed to the thrust on value-added products and improvement in operating efficiencies.
Going forward, while the policy pressures on steel prices and softening global steel prices may limit margins in the near term, prospects for strong demand growth, expansion in volumes and improving product mix augur well for SAIL’s earnings over the medium-long term.
Some primary and secondary steel producers have taken a 4 per cent cut in steel prices recently. However, this is to be viewed only as a temporary phenomenon in the light of lower global prices of steel.
Notwithstanding the economic slowdown, the domestic demand scenario for steel continues to be sanguine, given the growth potential of infrastructure and construction sectors.
Business Line..................
United Green Farmland, Chennai
Posted by :
sinhabp30Tracked by: 0 Boarder
Dear Investors,
if you have purchased a plot at Banglore during 1995-96-97, from UGF Chennai and still you have not got yr plot, please contact me by email:
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Yahoo id: bpsinha2001@yahoo.com...
support
Posted by : vkk43Tracked by: 0 Boarder
This share should find its support around 138/-....
SAIL
Posted by : zoombusinessTracked by: 0 Boarder
Prime Minister Manmohan Singh will lay the foundation stone for the Rs 2,000-crore expansion projects of Salem Steel Plant (SSP) in Salem on Friday. The projects include the much-awaited 1.80 lakh-tonne capacity steel melting shop (SMS) and expansion of the cold rolling mill from 65,000 tonne to 1.46 lakh tonne, and installation of additional roll grinder at the hot rolling mill (HRM).
According to SAIL sources, the major raw materials for the steel melting shop - mild steel scrap, revert scrap, nickel and ferro alloys - will be sourced from outside. It will produce stainless steel slabs in 200, 300 and 400 series grades in thickness ranging from 140 mm to 200 mm, 600 mm to 1300 mm in width, and a maximum length of 10.5 metre. The average slab weight will be15 tonne.
The inbuilt annual capacity of 1.86 lakh tonne of the hot rolling mill would be enhnaced to 2.40 lakh tonne with internal improvements and to 3.70 lakh tonne with the installation of another roll grinder.
The input for HRM will be from SSP (1.8 lakh tonne) and Alloy Steel Plant of SAIL (1.90 lakh tonne).
SSP\'s cold rolling capacity is 65,000 tonne and has about 5,000 tonne of hot rolled annealed and pickled material. They will be expanded to 1.46 lakh tonne of cold rolled products and 1.93 lakh tonne of hot rolled annealed and pickled coils.
The additional facilities proposed to be installed in the CRM are: Hot annealing & pickling line (500,000 tonne), 20-hi Sendzimir mill (1,10,000 tonne), coil preparation line (50,000 tonne), skin pass mill (100,000 tonne), slitting line (70,000 tonne), rotary polisher (1,000 tonne), tension levelling line (70,000 tonne) and acid recovery system.
courtesy Y F I
...
DIVIDEND
Posted by : kukkooTracked by: 0 Boarder
Has anybody eeceived dividend from SAIL ?? Please inform if you have. thanks...
Why SAIL sustain above 140
Posted by : dijyyaTracked by: 1 Boarder
It is not understood why SAIL sustain above 140 for last 40 days while Tata Steel trading almost its year low for quite sometime now. Any possibility to SAIL touch its recent low of 115 or below ?...
SAIL’s capital expenditure
Posted by : latikavTracked by: 0 Boarder
Inflation, input cost may increase SAIL’s capital expenditure----------New Delhi: The inflationary trend and rise in input costs are likely to escalate capital expenditure of Steel Authority of India Ltd (SAIL )in achieving the ambitious 26.18 million tons of hot metal production target by 2011-12.
“Due to increase in facilities required to achieve the enhanced production, rise in input costs and general inflationary trend, the capital expenditure is likely to be higher than what was estimated earlier,” SAIL said in a filing to Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
In June 2006, the steel major had informed the bourses that it would invest about Rs35,000 crore under its corporate plan to augment steel production to 26.22 million tons (MT) from the present level of 14.6 MT.
However, currently, the indicative cost to be incurred by SAIL under its corporate has risen to Rs54,000 crore.
Industry experts said the rise in input costs besides spiralling inflation, which is ruling at 12.40%, may further inflate SAIL’s capital expenditure in achieving the desired capacity augmentation.
Based on the latest review of its corporate plan, the steel major has revised its hot metal production target to 26.18 MT from the previous level of 22.55 MT.
Its target for crude steel production has also been revised to 24.59 MT from 21.59 MT and saleable steel to 23.13 MT from 20.25 MT earlier.
The expansion of SAIL’s IISCO and Salem steel plants are already underway at a cumulative cost of Rs16,350 crore while that of Bhilai, Durgapur, Rourkela and Bokaro steel plants are at different stages of tendering.
The company has already finalised Rs20,000 crore worth orders for the proposed expansion projects.
livemint.........
support
Posted by : vkk43Tracked by: 0 Boarder
This share will find its next support level around 138/- only....
Steel Co meeting today
Posted by : jatthaksTracked by: 0 Boarder
Any update on same....
buy sail@152
Posted by : GuestTracked by: 0 Boarder
buy sail today good return in this week it will go upto 175 in this week...
BSE Announcements on SAIL
Posted by : MMB MessengerTracked by: 1 Boarder
Steel Authority of India Ltd (SAIL) has informed BSE that with reference to the earlier announcement dated June 14, 2006 about production in 2011-12 and capital expenditure estimates as envisaged in the revised Corporate Plan. As contained in the above announcement, periodical reviews of the Corporate Plan including production envisaged therein is carried out from time to time. Based on the latest review, production envisaged are as under:...
Only Sail
Posted by : 9975797577Tracked by: 0 Boarder
get this firey stock in ur portfolio for 3 times ur money in coming years cmp 156 looks too good for short term tgt of 188...
SAIL to hike hot metal production capacit
Posted by : latikavTracked by: 0 Boarder
SAIL to hike hot metal production capacity to 26.2 MT by 2011-------------MUMBAI: Steel Authority of India Ltd (SAIL) plans to enhance its hot metal production from the base level of 14.6 million tonnes to 26.2 million tonnes per annum by FY 11, the company said in its annual report. "Sail is poised to make its mark globally in the years to come with the implementation of state-of-the-art clean and green technologies as part of its modernisation and expansion plans to increase its hot metal capacity to over 26 million tonnes by FY 11 and 60 million tonnes by FY 20," SAIL's Chairman, S K Roongta, said in its annual report.
The growth plan, besides targeting higher production also addresses the need for eliminating technology obsolescence, achieving energy savings, enriching product-mix, reducing pollution, developing mines and collieries, introducing customer-centric processes and developing matching infrastructure facilities.
As per the study of the International Iron and Steel Institute, steel demand in India is projected to grow to a level of around 180 million tonnes by FY 20. The company has incurred a capital expenditure of Rs 2,181 crore during FY 08, which has been funded through internal accruals.
During FY 08, the company continued to give an impetus towards new business initiatives including formation of new joint ventures, mergers and acquisitions and entering into memorandum of understandings for its long term strategic objectives.
ET...
Macquarie puts 'Outperform' on SAIL
Posted by : HELOBADSHAHTracked by: 0 Boarder
Macquarie puts 'Outperform' on sail sail..
target 205......
BUY,ACCUMULATE SAIL.....
Posted by : HELOBADSHAHTracked by: 0 Boarder
sail accumulate...180 target if sensex touches 15500....great stock,good dividend......
Boarders Outlook on SAIL
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