(Reuters) -Steel Authority of India (SAIL) reported a lower fourth-quarter adjusted profit on Wednesday, hurt by inventory costs.
The state-owned firm’s profit before exceptional items and tax dropped 13% to 15.94 billion Indian rupees ($187 million) in the quarter ended March 31.
Revenue grew 5% to 293.16 billion rupees. But its expenses rose about 6% due to an inventory charge in the current quarter that it had not incurred a year before.
KEY CONTEXT
SAIL’s results come a month after the government imposed a temporary 12% tax on some steel imports, known locally as a safeguard duty, to protect local producers who had to scale down operations and mull job cuts due to an influx of cheaper imports.
Earlier this month, industry leader JSW Steel posted quarterly profit that missed analysts’ estimates as weaker prices weighed.
However, a decline in costs of iron ore and coking coal — key steelmaking ingredients — helped offset the impact of weak prices for Tata Steel.
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 16.85 8.06 6.92 54.21 Sell 10 1.19 1.56
India
JSW Steel 18.31 9.07 13.91 142.21 Hold 32 0.99 0.28
Tata Steel 15.74 7.75 7.35 138.63 Buy 31 1.00 2.23
Jindal Steel And 14.62 8.03 14.89 46.93 Buy 29 0.97 0.21
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
JANUARY-MARCH STOCK PERFORMANCE
— All data from LSEG
— $1 = 85.3840 Indian rupees
(Reporting by Manvi Pant and Nandan Mandayam in Bengaluru; Editing by Sahal Muhammed)
