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Buy Steel Authority of India; target of Rs 160: ICICI Direct

ICICI Direct is bullish on Steel Authority of India recommended buy rating on the stock with a target price of Rs 160 in its research report dated June 29, 2021.

June 29, 2021 / 03:37 PM IST
 
 
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ICICI Direct's research report on Steel Authority of India


SAIL reported an operationally steady set of numbers wherein EBITDA/tonne came in broadly in line with our estimate. For Q4FY21, EBITDA/tonne was at Rs 14145/tonne, broadly in line with our estimate of Rs 15000/tonne (Q3FY21 EBITDA/tonne was at Rs 12089/tonne). For Q4FY21, sales volume was at 4.35 million tonne (MT), up 16% YoY (our estimate: 4.27 MT). For Q4FY21, standalone operations reported topline of Rs 23286 crore (up 44% YoY, 17% QoQ), higher than our estimate of Rs 22354 crore. Standalone EBITDA for the quarter was at Rs 6153 crore (up 21% QoQ) vs. our estimate of Rs 6405 crore. For Q4FY21, EBITDA/tonne was at Rs 14145/tonne, broadly in line with our estimate of Rs 15000/tonne (Q3FY21 EBITDA/tonne was at Rs 12089/tonne). During the quarter there was an exceptional expense of Rs 166 crore. Ensuing standalone PAT for Q4FY21 was at Rs 3444 crore (our estimate: Rs 3659 crore).



Outlook


We value the stock at 5.5x FY23E EV/EBITDA and arrive at a target price of Rs 160 (earlier Rs 130). We maintain our BUY recommendation on the stock.


For all recommendations report, click here


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first published: Jun 29, 2021 03:37 pm

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