Steel Authority of India - 3QFY17 Result Update - Higher Raw Material Cost & Lower Volume Dent Margins - Reliance Securities

Looking ahead, we expect the steel prices to remain firm, despite the government scrapping MIP and imposing Anti-Dumping Duty instead. We believe that without some serious cost cutting measures, the price hikes will not be sufficient for SAIL to be back into the black. Further, following the price hike in 4QFY17 (the absorption by the domestic users yet to be seen), there is not enough headroom to hike prices further. At CMP, the stock trades at an expensive valuation of 8.2x FY18E EV/EBITDA. We reiterate our REDUCE recommendation on the stock with an unrevised Target Price of Rs43.

Shares of STEEL AUTHORITY OF INDIA LTD. was last trading in BSE at Rs.60.35 as compared to the previous close of Rs. 59. The total number of shares traded during the day was 1566697 in over 4535 trades.

The stock hit an intraday high of Rs. 60.7 and intraday low of 58.2. The net turnover during the day was Rs. 93408802.

Source : Equity Bulls

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