India's SAIL posts Q2 profit drop on steep decline in steel prices, muted demand

Steel Authority of India

07/11/2024 13:34

Nov 7 (Reuters) - Steel Authority of India (SAIL)  SAIL.NS  reported a decline in second-quarter profit on
Thursday, as a sharp fall in steel prices and tepid demand weighed. 
    The state-owned firm's consolidated net profit fell 31% to 8.97 billion rupees ($106 million) in the three months
ended Sept. 30. 
    Revenues dipped 17% to 246.75 billion rupees. 
    Its expenses fell 14% to 238.24 billion rupees, owing to a nearly 10% decline in input costs as prices of iron ore
and coking coal - key steelmaking raw materials - fell. 
    
    KEY CONTEXT 
    
    Steelmakers in India have been struggling with rising cheap imports from China, South Korea and Vietnam, which has
led to steel prices tanking to over a three-year low in the quarter. 
    However, a fall in costs of iron ore and coking coal helped limit the hit to earnings. 
    Bigger rival JSW Steel  JSTL.NS  reported a bigger-than-expected quarterly profit, while Tata Steel  TISC.NS  topped
quarterly profit on higher volumes in Netherlands.
    
    PEER COMPARISON 
                                  Valuation (next 12     Estimates (next 12         Analysts' sentiment        
                                        months)               months)                                          
                      RIC        PE     EV/EBITDA       Revenue     Profit    Mean     No. of   Stock to       Div yield
                                                        growth      growth    rating*  analyst  price          (%)
                                                                                       s        target**       
 Steel Authority of    SAIL.NS   13.06            6.84     3.60      18.00    Sell          11      1.02             1.69
 India                                                                                                         
 JSW Steel             JSTL.NS   19.31            9.49    10.06      46.97    Hold          30      1.01             0.73
 Tata Steel            TISC.NS   13.39            7.16     6.41      96.38    Hold          30      0.91             2.36
 Jindal Steel And      JNSP.NS   12.63            7.27    18.66      31.31    Buy           26      0.88             0.21
 Power                                                                                                         
                                                                                                                         
 ** Mean of analysts' ratings standardised to a scale of strong buy, buy, hold, sell, and strong sell
** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the
PT
    
  JULY-SEPTEMBER STOCK PERFORMANCE  
   
     
-- All data from LSEG
-- $1 = 84.2730 Indian rupees

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SAIL Q2    https://tmsnrt.rs/3YvHHWM
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 (Reporting by Manvi Pant in Bengaluru; Editing by Mrigank Dhaniwala)
 ((Manvi.Pant@thomsonreuters.com; +918447554364;))