SP Tulsian of sptulsian.com is keeping cautious to negative stance on SAIL.
Tulsian told CNBC-TV18, “Problem with Steel Authority of India (SAIL) is the double-edged suffering because of the two reasons. First, the negative perception building up on the steel sector, that is ferrous steel and that is the reason we have seen all the stocks like Tata Steel, JSW Steel, Jindal Steel & Power (JSPL) taking a beating and apart from that we are always seeing that whenever the government goes for the divestment as has been the case with National Thermal Power Corporation (NTPC) or the National Mineral Development Corporation (NMDC) the stock gets corrected by about 3-4 percent.”
He further added, “SAIL seem to be a victim of that and apart from that if you really expect the Budget expectations it is not likely that government is going to raise the custom duty on the HR and CR flat products which will also be seen increasing competition for all these four companies. So overall the cautious view, but the upmove is seen in the stock because of the short covering. Largely the market has gone up today because of the short covering and nobody really wants to sit with having open positions on the short side. So probably this is the effect of the short covering, but keeping the cautious to negative stance on the stock.”