Motilal Oswal recommended Neutral rating on SAIL with a target price of Rs 42 in its research report dated September 16, 2020.
Motilal Oswal 's research report on SAIL
SAIL's 1QFY21 result was weak, as expected, with EBITDA loss of ~INR4.0b posted due to weak domestic demand and prices. The outlook, however, has improved, with both demand and pricing recovering in the quarter.
We expect better volumes and pricing to drive a 30% CAGR in EBITDA over FY20-22E. Net debt, however, is expected to remain elevated at INR467b in FY22, implying 5x net debt/EBITDA. The stock also trades at 6.3x EV/EBITDA, implying limited upside. Thus, we maintain Neutral, with TP of INR42.
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