(Reuters) -Steel Authority of India reported a rise in first-quarter profit on Friday, helped by a marginal rise in steel prices due to a temporary tariff imposed on some imports, easing input costs and strong domestic demand.
The state-owned company’s consolidated profit before exceptional items and tax more than doubled year-on-year to 9.68 billion rupees ($111.90 million) during the quarter ended June 30.
The company recorded a one-time cost of 3.12 billion rupees a year ago.
Its revenue from operations rose 8% to 259.22 billion rupees.
KEY CONTEXT
Last week, JSW Steel, India’s top steelmaker by market capitalisation, beat profit estimates on the back of higher prices and easing input costs.
India had imposed a 12% temporary tariff on some steel imports in April to help domestic mills, which have been under pressure from low-cost shipments from China. That moderated finished steel imports into the country and prompted domestic steelmakers to bridge the supply gap, boosting the metal’s prices.
Costs of iron ore and coking coal — key steelmaking raw materials — dropped in the quarter, analysts said, helping the bottom line of the mills.
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 14.45 7.05 5.58 27.36 Hold 9 1.14 1.48
India
JSW Steel 17.88 9.15 12.88 98.61 Hold 31 0.98 0.27
Tata Steel 14.80 7.67 6.99 101.70 Buy 30 1.00 2.21
Jindal Steel And 14.65 8.18 15.40 46.49 Buy 26 1.02 0.20
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
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 86.5060 Indian rupees
(Reporting by Manvi Pant and Ananta Agarwal in Bengaluru;)
