ICICI Direct has given Buy recommendation for Steel Authority of India recommended buy rating on the stock with a target price of Rs 160 in its research with a target price of Rs. 160 in its research report issued on Jun 29, 2021
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.