Avoid SAIL OFS, says Bhavesh Chauhan

Investors should avoid offer for sale (OFS) of SAIL, says Bhavesh Chauhan, Sr Analyst-Metals, Angel.

Chauhan told CNBC-TV18, "We are telling investors to avoid the offer for sale (OFS) of SAIL because we believe that even after a decline in stock price over 20-30 percent over the last three months, it is quite expensive at 7.5 times, close to 7 times FY15 EV/EBITDA."
He further added, "In general we find very little value in metal stocks. Selectively we like some of the stocks. As far as SAIL is concerned, we have seen its volumes to be disappointing over the last four quarters and going forward also given the slow down in steel demand in India, we expect SAIL to be one of the worst performance, being PSU with lack of focus on marketing and fixed cost are very high compared to other steel players. Going forward, FY14 is not looking that great and we expect an earnings decline of 16 percent for SAIL in FY14."