SAIL declines on profit-booking after swinging into black in Q2

Analysts at Morgan Stanley shared an “equal-weight” rating on the stock, with a target price of Rs 80.

“SAIL’s Q2 Ebitda performance was upbeat but we believe that the underlying remains weak. Volumes and realisations, however, proved to be on a strong foot during the quarter,” they wrote in a post-result review note.

Analysts at Motilal Oswal were ‘neutral’ on SAIL after the company’s Q2 performance exceeded estimates led by higher volumes and lower input costs.

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All major five plants of SAIL posted profit in Q2FY24 and H1FY24. Rourkela, Bokaro, and IISCO performed better and grew 15 percent, 8 percent, and 28 percent YoY, respectively. The Bhilai plant posted one of the highest revenues, up 45 percent YoY in Q2FY24.

Valuation-wise, shares of SAIL were trading at 11 times (x) price-to-earnings (PE) ratio, lower than sector’s mean of 15x PE multiple. Peers like Jindal Stainless and Shyam Metalics traded at 15x PE multiple and 12x PE multiple, respectively.

At 11.20 am, the stock was trading at Rs 89.95 on the BSE, down 0.71 percent from the previous close.

The steel major stock has surged 7 percent against a 6 percent rise in the benchmark Sensex. The stock hit a 52-week high of Rs 103 on September 4, 2023.

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