The shares of this midcap company traded flat in Monday’s trading session even after announcing strong Q2 FY24 results. The share is trading 15 percent away from its 52-week high.
With a market capitalization of Rs. 36,377 crores, Steel Authority of India (SAIL) shares opened Monday’s trading session flat at Rs. 89.30. The share hit a low at Rs. 87 making a loss of around 2 percent and closed its day at Rs. 88.20 apiece.
On 10th November, the company announced its June-September results. The company’s revenue increased by 22 percent from Rs. 24,359 crores during the June quarter to Rs. 29,712 crores in the September quarter. In addition, the net profit magnified by 512 percent from Rs. 212 crores to Rs. 1,305 crores during the same timeframe.
Comparing these metrics on a YoY basis, the revenue increased by 13 percent from Rs. 26,246 crores in Q2 FY23 to Rs. 29,712 crores during Q2 FY24. Furthermore, the company shifted from a net loss of Rs. 329.36 crores to a net profit of Rs. 1,305 crores during the same period.
Despite announcing strong results the share declined around 2 percent after several brokers started coverage with a neutral view.
According to the reports, Morgan Stanely, one of the well-known Investment Banks, has given an ‘Equal-weight’ rating on the company’s stock with a target price of 80 indicating a downside movement of around 9 percent.
The analysts in the post result note mentioned that SAIL’s Q2 EBITDA performance was upbeat but they believe that the underlying remains weak. Volumes and realizations, however, proved to be on a strong foot during the quarter.
Looking at the important financial ratios, the return on equity (RoE) declined from 24.58 percent in FY21-22 to 4 percent in FY22-23, and the return on capital employed (RoCE) decreased from 23.28 percent to 6.28 percent during the same time horizon. The company has a decent dividend yield of 1.81 percent.
According to the latest shareholding pattern, the Promoter or the Government of India has 65 percent of stakes in the company, the Public has 16.71 percent holdings, DIIs have a considerable stake of 14.06 percent where LIC holds 9.71 percent stake and the remaining 3.69 percent shares are with FIIs.
Headquartered in Delhi, the Steel Authority of India (SAIL) was incorporated in the year 1973. It is under the ownership of the Ministry of Steel, Government of India. It is the largest Government-owned steel producer.SAIL operates and owns five integrated steel plants at Bhilai, Rourkela, Durgapur, Bokaro, and Burnpur (Asansol) and three special steel plants at Salem, Durgapur, and Bhadravathi.
Written By Vaibhav Patil
