Steel Authority of India’s share price surged 4% to a high of Rs 110/share a day after it reported its quarterly results for the third quarter of FY25. However, the surge in share price came despite reporting a 66% year-on-year drop in its net profit. This is because the company is expected to be a beneficiary of safeguard duty on steel imports.
Nuvama raises rating and target price
The brokerage firm Nuvama Institutional Equities upgraded it to ‘Buy’ from ‘Reduce’ as it sees the company to be the biggest beneficiary of any imposition of safeguard duty on steel imports. It also raised the target price to Rs 123 from Rs 112 earlier, an upside of 16.3% from the closing price of February 12. Adding to that, it said the lower coking coal prices to improve gross margins. Also, this will lead to a 20% EBITDA compounded annual growth rate over the next two years.
SAIL’s performance in Q3
The company reported a 66% YoY drop in Q3 FY25 consolidated net profit at Rs 142 crore, compared to Rs 422 crore in the year-ago period. The revenue from operations in Q3 FY25 stood at Rs 24,490 crore, a growth of 5% YoY, as against Rs 23,349 crore posted in the same quarter of the last financial year.
However, the management is confident of managing the headwinds going forward.
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It announced a 31% YoY decline in consolidated net profit to Rs 897.15 crore in Q2 FY25, compared to Rs 1,305.59 crore in Q2 FY24. The company’s total income dipped to Rs 24,842.18 crore in Q2 FY25 against Rs 29,858.19 crore in the second quarter of the previous financial year.
SAIL Vs Nifty 50
The share price of SAIL has fallen 2.8% in the last five trading days. However, it was a volatile month for SAIL’s share price, given a return of 5.4%. The stock has erased 17.7% of investors’ money in the last six months. SAIL’s stock price has declined 10.5% in the last one year.
To compare, the benchmark index, Nifty 50 has wiped out 2.8% of investors’ wealth in the last five trading days. It has declined by 0.18% in the last one month and 4.5% in the previous six months.
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