(Reuters) – Steel Authority of India Ltd (SAIL) reported a drop in third-quarter profit on Tuesday, hurt by weak domestic demand and as prices of the key alloy were subdued amid an influx of cheap imports.
The state-owned firm reported net profit of 1.26 billion Indian rupees ($14.5 million) in the three months ended December 31, down from 3.31 billion rupees a year earlier.
Revenue rose a marginal 5% to 244.90 billion rupees.
KEY CONTEXT
Indian steelmakers, including JSW Steel, Jindal Steel and Tata Steel, have all reported a hit in quarterly earnings due to lower demand and a continued decline in prices.
Steel, used heavily in the construction and auto industries, saw continued challenges in demand due to lower construction activity and project delays, while sustained influx of cheap imports from countries like China weighed on prices.
China, South Korea and Japan accounted for 79% of India’s overall finished steel imports, which hit a seven-year high in April-December.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Steel Authority of 12.68 6.90 5.92 34.14 Sell 10 0.95 1.81
India
JSW Steel 19.62 9.45 12.77 114.85 Hold 30 0.98 0.74
Tata Steel 16.38 7.29 8.22 191.77 Buy 30 0.89 2.60
Jindal Steel And 12.96 7.29 17.78 38.08 Buy 26 0.85 0.24
Power
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER-DECEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 86.7110 Indian rupees
(Reporting by Manvi Pant in Bengaluru; Editing by Varun H K and Leroy Leo)
