Motilal Oswal - Steel Authority of India Ltd. (SAIL) MOSL: SAIL (Neutral)-Margins lower on decline in product spreads-Tailwinds of operating leverage

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Motilal Oswal

EUR 120.00 For Business Accounts Only

MOSL: SAIL (Neutral)-Margins lower on decline in product spreads-Tailwinds of operating leverage

SAIL: Margins lower on decline in product spreads; Tailwinds of operating leverage; Maintain Neutral

(SAIL IN, Mkt Cap USD3b, CMP INR50, TP INR57, 14% Upside, Neutral)

4QFY19 EBITDA declined 14% QoQ (-15% YoY) to INR22.1b (our est. INR25.1b) on lower spreads (lower realization and high raw material cost). EBITDA/t was down INR2,729 QoQ to INR5,236. Adj. PAT declined 20% QoQ to INR5b (our est. INR5.8b).

Steel sales increased 31% QoQ (+13% YoY) to 4.2mt. Production rose 9% QoQ (+15% YoY) to 4.1mt.
Steel realization declined 11% QoQ to INR43,754/t on lower domestic steel prices and weaker product mix.

03/06/2019 1 EN

Underlying

Steel Authority of India Ltd.

Steel Authority of India is principally engaged in the manufacturing iron and steel, both basic and special steels, for domestic construction, engineering, power, railway, automotive and defense industries and for sale in export markets. Co. steel products includes hot metal, crude steel, pig iron, cold rolled sheets and coils, galvanized sheets, electrical sheets, structural, railway products, plates, bars and rods, stainless steel and other alloy steels. Co. operates predominantly in India.

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INE114A01011 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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MOSL: SAIL (Neutral)-Margins lower on decline in product spreads-Tailwinds of operating leverage

STEEL AUTHORITY OF INDIA sees an upgrade to Positive due to a better fundamental star rating

Monthly LMI Update Independent Investment Research

MOSL: SAIL (Neutral)-Operational miss on lower realization, higher cost

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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