Motilal Oswal has given Buy recommendation for SAIL recommended buy rating on the stock with a target price of Rs 175 in its research r with a target price of Rs. 175 in its research report issued on Aug 08, 2021
Motilal Oswal’s research report on SAIL
SAIL continues to reap the benefits of higher steel prices as it recorded its highest ever quarterly EBITDA of INR65.3b (+7% QoQ), despite volumes declining by 24% QoQ. EBITDA/t was the highest ever at INR19,728/t. Net debt declined further to INR311b (v/s INR367b in Mar’21). We expect SAIL to further reduce its debt by INR44b to INR267b at the end of FY22. We broadly maintain our FY22E/FY23E estimate.
We value the stock at 5x FY23E EV/EBITDA at INR175/share, implying a target P/B of 1.1x (v/s its historical average of 0.7x). At the CMP, the stock is trading at 3.3x FY22E EV/EBITDA. We reiterate our Buy rating.