SAIL stock sinks after Citi downgrades rating, slashes target price

Citi has downgraded the Maharatna company to 'sell' from 'buy', cutting the PSU's share target price to Rs 80 from Rs 110.

SAIL is set to announce its September-quarter results on November 10. Photo: Reuters/Representational

SAIL Share Price: Shares of Steel Authority of India Limited were trading down on BSE on Monday after brokerage Citi downgraded its rating for the company and cut the share price target.

The shares of the Public Sector Undertaking were trading lower by 1.27 per cent, or Rs 1.10, at Rs 85.74 each on Tuesday.

Citi on SAIL

Citi has downgraded the Maharatna company to 'sell' from 'buy', cutting the share target price to Rs 80 from Rs 110.

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SAIL is set to announce its quarterly results on November 10.

SAIL chairman Amarendu Prakash said on Monday that the company wanted to increase coking coal purchases from Russia due to cheaper prices and was expecting four shipments, each with a capacity of 75,000 tonnes.

SAIL Q2 Result Estimates

With the company set to announce its September quarter on November 10, brokerage Sharekhan estimates the Maharatna company's net sales in the second quarter to slip by 3 per cent.

The brokerage predicts SAIL's sales number to decline to Rs 25,452 crore in the September quarter against Rs 26,246 crore in the corresponding period last fiscal.

Sharekhan says SAIL's profit after tax in the quarter under review can also jump from negative to positive.

It estimates the profit to climb to Rs 665 crore in the second quarter of the current fiscal from the loss of Rs 329 crore in the same quarter last year.

As per analysts' estimates, the company's operating margin is set to soar higher by 619 bps to 9 per cent in Q2 FY24 from 2.8 per cent in Q2 FY23.

Expert rates SAIL long-term option

AK Prabhakar, Head of Research at IDBI Capital Markets, rates SAIL a very good investment option for long term. "It (SAIL) is in its worst phase of the cycle and it can only get better," said Prabhakar.

SAIL shares: Past performance

The stock of the New Delhi-based PSU steelmaker strengthened 9.7 per cent in the September quarter, sharply outperforming a 2.4 per cent rise in the headline Nifty50 index.

As of November 6, SAIL shares have rewarded investors with a return of 75.4 per cent in the past one year while the blue-chip index has risen 7.1 per cent.

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