SAIL's Stock Price Rises 50% In One Month - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

SAIL's Stock Price Rises 50% In One Month

May 4, 2021

Shares of state-owned Steel Authority of India (SAIL) have gained more than 50% in the past one month.

The bulk of the gains have come in the last couple of sessions, with the stock skyrocketing 28% from Rs 100 to Rs 128.

While the entire metal pack has been on fire, SAIL has been the best-performing stock in recent weeks.

Key Triggers - Rising Steel Prices, Aggressive Capex Plans

Domestic steel prices have increased recently but still remain at a discount to imports.

Domestic hot-rolled coiled (HRC) steel prices have risen by Rs 7,000/tonne(t) in April and by Rs 4,000-4,500/t in May.

But they're still trading at a discount of Rs 8,000/t to the landed cost of imports. This implies room for further hikes.

SAIL is also in the middle of its most aggressive expansion plan. It's progressively commissioning new capacity.

The company has increased its capital expenditure target by 67% to Rs 80 bn for FY22 from the revised target of Rs 48 bn in FY21.

--- Advertisement ---
The Smallcap Revival Summit

Join us on the evening of 20th May to learn,

• Why despite rallying over 100% since March-2020 lows... small-cap stocks are set for a massive rally over the coming months and years
• Details of our top 3 stocks to capture potentially huge gains from this upcoming small-cap rally
• And how to spot opportunities, even in the current market, with the potential to generate 200%, 400%, and even 900% long-term gains

Plus, there is a lot more that we are going to cover.

The summit is free to attend for Equitymaster readers.

But since there are limited seats, we would recommend you to register at the earliest.

Grab your spot for the Summit here. It's free.

Over the years, SAIL has been a laggard due to project delays, high employee costs, and a high-cost structure compared to its peers.

However, after the difficult market conditions during the initial months of FY21, the company has adopted a focused approach on improving its volumes and operational efficiencies and deleveraging its balance sheet.

Going forward, the company is expected to see better operational efficiency which could lead to gains of Rs 2,500-3,000/t in the next two years.

Commodity Cycle, Chinese Emission Reforms Aid Stock

Steel stocks have recently been beneficiaries of the robust demand by various sectors and have been supported by the government's infrastructure pipeline. De-leveraging and capex have also aided the momentum.

China's push toward carbon neutrality is also a trigger to drive prices higher.

With the objective of going carbon neutral and reducing emissions, China has now removed a rebate on value-added tax (VAT) charged on exports of several steel products.

This makes exports for steel companies in China less attractive.

With global steel production picking up due to increased demand and a production shift from China, iron ore prices could remain supported.

Get Details: We are Bullish on These 3 Little-known Stocks

How the Stock Has Performed Recently...

The stock price of SAIL has sky-rocketed over 100% since the Union Budget and over 50% in the last month given its higher sensitivity to prices.

The Nifty metal index is also on a remarkable run since the beginning of February, surging 62% so far.

Even the second wave of the coronavirus pandemic has failed to clamp down on the rally in the metal index.

Most leading steel companies such as Tata Steel and JSW Steel are currently trading at their lifetime highs.

In the last one month shares of these companies have risen over 20% and 30%, respectively.

Shares of SAIL opened at Rs 129.9 on the BSE and Rs 129.7 on the NSE today. At its current price, it is trading at a P/E ratio of 16.9.

About Steel Authority of India

Steel Authority of India Limited (SAIL) is an Indian government owned steel manufacturing enterprise based in New Delhi, India.

With an annual production of 16.3 m metric tons, SAIL is the largest steel producer in India and the 20th largest steel producer in the world.

--- Advertisement ---
[EXCLUSIVE] Webinar Invitation -
"Pandemic Impact. Economic Recovery. Investment Strategy - Insights Revealed!"

Date: May 21st | Time: 6pm | Venue: Your Computer

The Covid-19 crisis in India is said to be one of the biggest crises the country has ever seen.

Amidst this turmoil, investors are also questioning the future of their financial wellbeing.

In this exclusive webinar, Chirag & Sorbh will answer big questions like:

• How will the second wave of Covid-19 impact economic recovery?
• What asset allocation could you consider for uncertain times like this?
• Is the Indian stock market immune to the Covid-19 surge?

And many more...

Click Here to Register FREE for this Exclusive Webinar
[No Payments | No Credit Card | Absolutely FREE] | [Yes! I want to attend this Webinar]

SAIL operates and owns five integrated steel plants at Bhilai, Rourkela, Durgapur, Bokaro, and Burnpur (Asansol) as well as three special steel plants at Salem, Durgapur, and Bhadravathi. It also owns a Ferro Alloy plant at Chandrapur.

As a part of its global ambition, the company is undergoing a massive expansion and modernisation programme. This involves upgrading and building new facilities with an emphasis on state-of-the-art green technology.

For more details about the company, you can have a look at SAIL's factsheet and SAIL's quarterly results on our website.

You can also compare SAIL with its peers -

SAIL vs Tata Steel

SAIL vs JSW Steel


SAIL vs Tata Steel BSL

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

Equitymaster requests your view! Post a comment on "SAIL's Stock Price Rises 50% In One Month". Click here!

2 Responses to "SAIL's Stock Price Rises 50% In One Month"

Ravi shah

May 5, 2021

EQM ,Pl update factsheet data of sail as it shows march 2019 and march 2020 data.Update on Sail is very heplful.Thanks EQM team.


sridhar vetcha

May 4, 2021

Q3 has been the best ever quarter and Q4 is looking to beat Q3. Based on this and estimated EPS this year, the share is trading at 4x PE, a huge discount to the JSW which has similar / smaller capacity than SAIL. This means, there is a lot more fire left in the price!. Happy investing :)

Equitymaster requests your view! Post a comment on "SAIL's Stock Price Rises 50% In One Month". Click here!

More Views on News

SAIL 2019-20 Annual Report Analysis (Annual Result Update)

Dec 10, 2020 | Updated on Dec 10, 2020

Here's an analysis of the annual report of SAIL for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of SAIL. Also includes updates on the valuation of SAIL.

Jindal Steel & Power Back in Action; Posts Rs 19 bn Profit in Q4 (Views On News)

May 13, 2021

Key takeaways from Jindal Steel and Power Q4FY21 results.

Amid Metal Rally, Hindustan Copper Shares Hit 8-Year High (Views On News)

May 10, 2021

The stock is up 25% in the last 3 days and has risen over 600% in the last year.

Tata Steel Shares Surge to Record High Post Q4 Results. Here's What Investors Need to Know (Views On News)

May 6, 2021

Tata Steel swung to quarterly profitability as the economic recovery drove a rebound in steel consumption.

SAIL Announces Quarterly Results (1QFY20); Net Profit Down 87.3% (Quarterly Result Update)

Aug 13, 2019 | Updated on Aug 13, 2019

For the quarter ended June 2019, SAIL has posted a net profit of Rs 688 m (down 87.3% YoY). Sales on the other hand came in at Rs 148 bn (down 6.8% YoY). Read on for a complete analysis of SAIL's quarterly results.

More Views on News

Most Popular

All You Need to Know About Primary and Secondary Markets

A look at the various types of primary and secondary markets and the key differences between them.

Is Intraday Trading For You? (Fast Profits Daily)

May 13, 2021

Do you think you have what it takes to be an intraday trader? Find out in this video.

My Secret to Find Breakthrough Stocks (Fast Profits Daily)

May 7, 2021

I've used this trading technique for many years with great success. I'm sharing it with you today.

Are the Stock Markets Deaf to Covid Agony? (Profit Hunter)

May 6, 2021

Why are markets discounting the economic impact of Covid?

The Key to Profit from India's EV Revolution (Profit Hunter)

May 7, 2021

Stocks you must consider investing in before buying your first electric vehicle.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


May 18, 2021 (Close)