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SAIL may be privatised!

Feb 8, 2000

According to newspaper reports, the government is likely to consider the privatisation of Steel Authority of India (SAIL). The centre is also taking up the capital restructuring plan for the company. SAIL is the world's 10th largest and India's largest steel manufacturer. It operates 4 integrated steel plants and 2 speciality steel plants. The company has been on the brink of bankruptcy for some time now. It is attempting to raise resources by getting rid of its loss making units.

The privatisation of the company is in the best interests of all the concerned parties except of course the employee base, which in all probability will be pruned dramatically. The government would get rid of a cost centre, thus easing the burden on its insufficient resources. Infact, the cash inflow from the disinvestment would help bridge the gap in the government's finances.

SAIL on the other hand would benefit from a new management, fresh infusion of funds, better technology and the absence of bureaucratic control. The proposal to privatise the company is likely to meet with stiff opposition from the unions, which would object to the large-scale lay offs resulting from the process. The government needs to show the kind of will it has shown in privatizing Modern Foods, another public sector company.

Market View:
The stock is rated as a 'SELL' due the company's low employee productivity and the outdated technology. However, in view of the government initiatives to restructure the company, some analysts are taking a fresh look at the company.


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More Views on News

SAIL Announces Quarterly Results (3QFY19); Net Profit Up 1327.9% (Quarterly Result Update)

Feb 12, 2019 | Updated on Feb 12, 2019

For the quarter ended December 2018, SAIL has posted a net profit of Rs 6 bn (up 1327.9% YoY). Sales on the other hand came in at Rs 158 bn (up 3.3% YoY). Read on for a complete analysis of SAIL's quarterly results.

SAIL 2017-18 Annual Report Analysis (Annual Result Update)

Dec 21, 2018 | Updated on Dec 21, 2018

Here's an analysis of the annual report of SAIL for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of SAIL. Also includes updates on the valuation of SAIL.

SAIL Announces Quarterly Results (2QFY19); Net Profit Up 202.7% (Quarterly Result Update)

Nov 5, 2018 | Updated on Nov 5, 2018

For the quarter ended September 2018, SAIL has posted a net profit of Rs 6 bn (up 202.7% YoY). Sales on the other hand came in at Rs 167 bn (up 22.8% YoY). Read on for a complete analysis of SAIL's quarterly results.

SAIL: Operating Margins Offer Hope; Bottomline Languishes in Red (Quarterly Results Update - Detailed)

Nov 21, 2017

The company registered good performance at the operating level and reported a positive EBITDA of Rs 9.1 billion during the quarter. However, bleeding continued at PAT level.

SAIL: Bleeding Continues at EBITDA Level... (Quarterly Results Update - Detailed)

Aug 28, 2017

The company registered a negative EBITDA of Rs 839 million during the quarter. This is on the back of an increase in raw material prices.

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