- Steel Authority’s net income for the first quarter was reported at 6.85 billion rupees, significantly lower than the estimated 11.28 billion rupees. The previous year, the net income was 106.8 million rupees.
- Revenue rose to 259.22 billion rupees, marking an 8% increase year-over-year, slightly exceeding the forecast of 255.29 billion rupees.
- Total costs increased by 5.5% year-over-year, reaching 251.93 billion rupees.
- Raw material costs fell by 21% year-over-year to 107.42 billion rupees, which was below the estimated 116.39 billion rupees.
- Finance costs decreased by 14% year-over-year, logged at 5.95 billion rupees, against an anticipated 6.52 billion rupees.
- Other expenses rose sharply by 13% year-over-year to 78.63 billion rupees, higher than the projected 71.99 billion rupees.
- Other income showed a decrease of 20% year-over-year, amounting to 1.61 billion rupees.
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 21% year-over-year to 29.25 billion rupees.
- Analyst recommendations include 5 buys, 11 holds, and 12 sells.
Steel Authority of India on Smartkarma
Steel Authority of India‘s performance has come under scrutiny by analysts on Smartkarma, such as Rahul Jain who published a research report titled “Steel Authority of India: Weak on Expansion.” Despite SAIL’s extensive resources, operational inefficiencies have hindered its growth and market share. Jain highlights concerns about the company’s underperformance, aging infrastructure, and high debt levels. SAIL’s stock may warrant a greater discount given its weak volume outlook and financial position, with the analyst suggesting a valuation of 0.6x book value to better reflect the risk-reward scenario.
A look at Steel Authority of India Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 5 | |
| Dividend | 5 | |
| Growth | 2 | |
| Resilience | 2 | |
| Momentum | 2 | |
| OVERALL SMART SCORE | 3.2 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Steel Authority of India Limited, an integrated steel manufacturing company with a wide range of steel products, receives an overall positive outlook based on the Smartkarma Smart Scores. With top scores in both Value and Dividend factors, the company demonstrates solid financial health and a commitment to rewarding shareholders. However, its Growth, Resilience, and Momentum scores are comparatively lower, suggesting some challenges in these areas. Despite this, the company’s strong fundamentals and consistent dividend payments underscore its potential as a sound long-term investment.
Steel Authority of India Limited, backed by the Government of India as its majority shareholder, stands out in terms of value and dividend offerings, making it an attractive choice for investors seeking stability and income. While the company may face growth and resilience issues, the foundation set by its robust value proposition and dividend policy bode well for its future prospects. Investors looking for a reliable and established player in the steel industry may find Steel Authority of India Limited a compelling option based on its impressive performance in value and dividend aspects.
Summary: Steel Authority of India Limited is an integrated steel manufacturing company with a product range covering various steel products, including pig iron, steel ingots, special steel, and more. The Government of India holds a significant stake in the company.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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