SAIL nears 5-year high on expectation of good Q2 results; up 60% in 1-month

6 November 2017

Steel Authority of India (SAIL) surged 7% to Rs 85.70 in intra-day trade, extending its 36% rally of the past two weeks on the BSE, ahead of its September (Q2FY18) results next week.  The stock was trading at its highest level since December 4, 2014.

The board of directors of state-owned company is scheduled to meet on Thursday, November 9, 2017 to consider the un-audited financial results of the company for Q2FY18 and half year ended September 30, 2017.

In June 2017 quarter (Q1FY18) the company had reported a standalone net loss of Rs 801 crore against loss of Rs 536 crore in the same quarter year ago.

The brokerage firm Emkay Global Financial Services expected that SAIL to report lower net losses of Rs 149 crore in Q2FY18 against Rs 567 crore in a year ago quarter. The company may report Ebitda (earnings before interest, tax, depreciation and amortization) profit of Rs 1,059 crore against Rs 112 crore in previous year quarter.

“We are expecting positive EBITDA/tn at Rs2870/tn (vs loss in Q1FY18). Sales volume is likely to improve by 22% qoq to 3.69mt and realization by Rs 2400/tn (qoq). Raw material and employee costs are likely to decrease on per tonne basis by 13% and 7% qoq, respectively,” the brokerage firm said in Q2FY18 results preview.

Edelweiss Securities expect company to again be profitable at EBITDA level as share of semis is expected to go down and volume is expected to go up.

We expect coking coal price pressure to recede as higher priced quarterly contracts are not there anymore, the brokerage firm said in results preview.

Source: BS