Buy This Large Cap Stock For A Return of 45.3% In 1 Year Says Kotak Securities
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Q2 FY’22 results of the company
In the second quarter of FY’22, SAIL reported a consolidated net profit of Rs 4339 crore. According to SAIL’s performance in Q2 FY’22, Crude Steel Production totaled 4.468 million tonnes, Saleable Steel Sales remained 4.280 million tonnes, and Gross Borrowings were Rs 22,478 crore as of 30 September 2021, down from Rs 35,350 crore as of 31 March 2021, a reduction of Rs 12,872 crore during H1 FY’22. The company’s board of directors has declared an interim dividend of Rs 4 per share to shareholders for FY’22.
| Date: 29.10.2021 | Standalone | In Rs (Cr) | In Rs (Cr) | In Rs (Cr) | Consolidated | In Rs (Cr) | In Rs (Cr) | In Rs (Cr) |
|---|---|---|---|---|---|---|---|---|
| Q1 FY’22 | Q2 FY’22 | H1 FY’22 | H1 FY’21 | Q1 FY’22 | Q2 FY’22 | H1 FY’22 | H1 FY’21 | |
| Revenue from Operations | 20642 | 26827 | 47469 | 25991 | 20643 | 26828 | 47471 | 25993 |
| EBITDA | 6674 | 7248 | 13921 | 1973 | 6741 | 7290 | 14031 | 2078 |
| PBT | 5145 | 5753 | 10898 | -1374 | 5212 | 5795 | 11007 | -1270 |
| PAT | 3850 | 4304 | 8154 | -877 | 3897 | 4339 | 8236 | -790 |
| Source: sail.co.in |
Buy Steel Authority of India (SAIL) with a target price of Rs 170 says Kotak Securities
Kotak Securities has said “SAIL’s EBITDA/ton increased 18% QoQ to a record high of Rs19,728/ton on higher steel prices. SAIL’s expansion projects are at the last stage of completion, we conservatively build +7% YoY volume in FY22E versus guidance of 11%. We expect SAIL’s EBITDA to grow at 10% CAGR over FY21-24E.”
The brokerage has claimed in its research report that “SAIL reduced net debt by Rs4200 cr in 1QFY22, aided by strong operational cash flows and measured CAPEX. We estimate net debt to reduce further to Rs19500 cr as of FY22E, aided by strong margins. We estimate that SAIL’s future growth CAPEX would be funded by Operating Cash Flow assuming mid-cycle margins from FY2023E and net debt/EBITDA to remain below 1X.”
Disclaimer
This stock is picked from the brokerage report of Kotak Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
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