SAIL: Bottomed Out Valuation; SAIL to Benefit from a Prolonged Steel Up-Cycle
Equity Bottom-Up
130 Views, 13 Jan 2022 17:10
EXECUTIVE SUMMARY
We initiate coverage on SAIL with a BUY recommendation and a Target Price (TP) of Rs 150/share, implying an upside of 44% from the CMP
While we expect steel margins to come under pressure in H2FY22, they are likely to recover post H2FY22 and remain above cycle average
Our optimism is based on the expectation of weak demand in China getting offset by lower production forecasts and China continuing to disincentivize steel exports
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