SAIL is Steel Authority of India Limited. It is a public sector enterprise owned by the Indian Government.
As of March 2018, SAIL has a market capitalisation of over Rs.30,000 crore.
Wealth and Recent PerformanceQ1 Financial Results, FY19
- From the unaudited standalone financial results of the company for the quarter that ended on June 2018, we can see the following:
- The revenue from operations dropped to Rs.15,907.19 crore in the current quarter from Rs.17,037.83 crore in the previous quarter.
- The other income of the company also decreased from Rs.227.03 crore in the previous quarter to Rs.97.76 crore in the current quarter.
- The total income of the company decreased to Rs.16,004.95 crore in the current quarter from Rs.17,264.86 crore in the previous quarter.
- The total expenses of the company decreased from Rs.16,455.94 crore in the previous quarter to Rs.14,899.74 crore in the current quarter.
- The profit before exceptional items and tax was Rs.1,105.21 crore in the current quarter while it was Rs.808.92 crore in the previous quarter. Considering this, it is notable that the net profit for the current quarter is Rs.540.43 crore, down from Rs.815.57 crore in the previous quarter.
- The total comprehensive income for the current quarter decreased to Rs.540.81 crore in the current quarter, down from Rs.992.41 crore in the previous quarter.
Annual report for the financial year 2017–2018
- From the annual report released by the company, we can see the following from the financial highlights section:
- Gross sales of the company grew from Rs.49,180 crore in the FY17 to Rs.58,297 crore in the FY18.
- Net sales of the company also showed growth with a value of Rs.56,893 crore in the FY18 compared to Rs.43,866 crore in the FY17.
- The earnings before depreciation, interest and tax or EBITDA for the FY17 was Rs.672 crore whereas it was Rs.5,184 crore in FY18. This indicates a solid improvement in performance with the company showing strong growth numbers. The EBITDA value is one of the ways in which a company’s performance is studied.
- The company posted a loss of Rs.2,833 crore for the FY17 and a loss of Rs.482 crore in the FY18. This indicates that the company found ways to minimise their losses through a combination of different methods.
- The net worth of the company reduced to Rs.35,714 crore in FY18 from Rs.36,009 crore in FY17.
- The net fixed assets of the company grew from Rs.50,285 crore in FY17 to Rs.58,612 crore in FY18.
- The market price per share increased from Rs.61.20 at the end of FY17 to Rs.70.20 at the end of FY18.
- The standalone financial results for the quarter ending 31 March 2018, indicate the following:
- The revenue from operations grew to Rs.17,037.83 crore from Rs.15,323.65 crore the previous quarter.
- The other income of the company grew from Rs.119.48 crore in the previous quarter to Rs.227.03 crore in the current quarter.
- The total income of the company grew from Rs.15,443.13 crore in the previous quarter to Rs.17,264.86 crore in the current quarter.
- The total expenses of the company increased to Rs.16,455 crore from Rs.15,317.61 crore in the previous quarter.
- Net profit for the quarter rose to Rs.815.57 crore from Rs.82.27 crore in the previous quarter. This marks a very strong increase in profit over the course of a single quarter.
- The total comprehensive income for the quarter ending March 2018 was Rs.992.41 crore compared to Rs.47.48 crore in the previous quarter.
- According to the unaudited financial results for the quarter ended December 2017, the total income of the company in the third quarter of the fiscal year 2017–2018 was Rs.15,443.13 crore, which was higher than the total income in the previous quarter which stood at Rs.13,666.05 crore.
- The total income of the company in the third quarter of the fiscal year 2016–2017 was Rs.12,688.47 crore. Thus, the total income of the company grew by Rs.2,754.66 crore from the third quarter of FY17 to the third quarter of FY18.
- Total expenses increased from Rs.14,108.84 crore in the second quarter of the financial year 2017–2018 to Rs.15,317.51 crore in the third quarter of the same financial year.
- Total expenses in the third quarter of the previous financial year ending 2017 was Rs.13,943.18 crore.
- The profit before tax for the third quarter of the financial year 2017–2018 was Rs.82.27 crore and in the previous quarter, the company had a loss before tax of Rs.740.33 crore. The company also showed a loss before tax in the third quarter of the previous financial year 2016–2017 with a value of Rs.1,253.57 crore.
- Net profit for the company in the third quarter of the financial year 2017–2018 was Rs.43.16 crore and in the previous quarter, the company had made a net loss of Rs.539.06 crore. In the preceding financial year ending 2016–2017, the company had made a net loss of Rs.794.84 crore in the third quarter.
- The company had been making losses for close to ten quarters before showing a profit in the third quarter of the financial year 2017–2018.
Stock trend in 2018
- In January 2018, SAIL’s stock opened at around Rs.92 and after a very brief dip, the stock gained and reached Rs.100 by mid-month.
- After the peak, the stock dropped again by about Rs.6 in a single day.
- After this, the stock fluctuated between Rs.90 and Rs.97 for the rest of the month, except on the last day of the month.
- On the last day of the month, the stock dipped below Rs.90 for the first time since opening day in 2018.
- For the first week of February, the stock did not breach the Rs.90 mark, the stock touched a low of about Rs.82 but for the most part fluctuated between Rs.80 and Rs.90.
- In the second week of February, the stock breached the Rs.90 mark again, touching peaks of about Rs.93 and Rs.95. The stock held steady at about Rs.95 for a couple of days before dipping again to below Rs.90.
- For the rest of February, the stock fluctuated between Rs.80 and Rs.90 with the lowest value for the last week of the month being about Rs.83.
- The stock continued to decline into March, entering into a freefall by the end of the first week of that month, with the stock touching a low of about Rs.69.
- The stock appeared to gain a little after that with an increase of about Rs.3 to close at about Rs.72 by the end of the second week of March.
- The price of the stock fluctuated a lot, almost Rs.10, during the course of the last couple of weeks of March 2018. The stock closed for the month of March 2018 at about Rs.70.
- In the month of April 2018, the stock saw some gains in price. The stock gained over the first three days and dipped on slightly on the fourth day. Then, the stock appeared to pick up again and towards the close of the third week of the month, the stock appeared to have touched a high of about Rs.80. The stock did not sustain this price for the rest of the month. The price of the share decreased again to hold steady around Rs.77 by the end of the month.
- Compared to the price of the share at the end of the month of April 2018, the stock did dip in price in the month of May 2018. During the first two weeks the stock kept increasing and decreasing in price but it never regained the previous month’s closing price level. During the last week of the month, the stock even touched a low of about Rs.68. The stock then gained in price over the last few days of the month to close at about Rs.75 for the month.
- While the price of the share dipped by about Rs.3 on the first day of the month of June 2018, the stock gained right after. The stock gained steadily over the course of the first two weeks of the month. Towards the end of the second week, the stock price touched a high of about Rs.89. The high was not sustained and the stock steadily declined in price over the course of the rest of the month to close at about Rs.83 at the end of the month.
- The price of the stock fell further in July 2018 with the stock touching a low of about Rs.70 during the mid-month point. The stock then gained slowly over the course of the final weeks of the month to close at about Rs.77 at the end of the month.
- In August 2018, the stock fluctuated between Rs.81 and Rs.74. The final price for the month was about Rs.79.
Stock history (2016–2017)
- In January 2016, the stock opened at around Rs.48. The stock breached the Rs.50 mark around the fifth day of the month. The stock then dipped again below Rs.50 by the end of the first week of the month. The stock had not recovered even by the second week, continuing the trend of a steady decline in price. By the third week of January, the stock had touched a low of about Rs.41. The stock gained by about Re.1 to close at about Rs.42 by the end of the month. The stock opened at about Rs.42 in February 2016. The stock followed a downward trend for a few more days with a low of about Rs.38 before gaining again. By the second week, the stock had begun dipping again, reaching a low of about Rs.34, which was the lowest the stock had been since the beginning of the calendar year 2016. The stock continued at around this price for the rest of the month. The beginning of March 2016 saw a strong gain in the price, the stock crossed the Rs.40 mark again. This strong trend continued till the third week of March during which time the stock even crossed Rs.45. But the stock dipped again to end the month at about Rs.43.
- In April 2016, the stock opened at about Rs.43. It did not cross Rs.45 until about 20 April, 2016. The stock continued to remain over Rs.45 for the rest of the month, closing at about Rs.47 at the end of the month. In May 2016, the stock opened at about Rs.47, but dropped about Rs.5 in less than five days, fluctuating between Rs.42 and Rs.40 till about 16 May, 2016. Then, in the fourth week of March, the stock dipped to about Rs.39, its lowest price for that quarter. Then, it began an upward trend, to end the month at about Rs.42. In May, the stock fluctuated between Rs.42 at the lowest and Rs.45 at the highest. The stock remained largely steady in this month.
- In July 2016, the stock proceeded on an upward trend that culminated in a peak of about Rs.50 by mid-month. For the rest of the month the stock fluctuated between Rs.46 and Rs.50 but it largely remained below the Rs.50 mark. In August, until the fourth week, the stock remained in the range between Rs.40 and Rs.50, dipping again to end the month at about Rs.48. September saw this trend continue with a steep increase in the first week, with a high of about Rs.53. After that high, it declined again, to close the month at about Rs.46.
- In October 2016, the stock opened at about Rs.48, and remained below Rs.50 for the most part. But in the last few days of the month, the stock crossed Rs.50, with a peak of Rs.52 and closed for the month at Rs.51. In November 2016, the stock opened at about Rs.52, and remained over Rs.50 for the major part of the month. A brief dip that month resulted in a low of over Rs.47 but the stock recovered soon after to end the month at about Rs.51. In December 2016, the stock remained at over Rs.50 for the most part. In the last week of the month, the stock dipped to below Rs.50 and ended the month at Rs.49.
- In January 2017, the stock opened at about Rs.50 and then continued on an upward trend that lasted the rest of the month. The stock ended the month at a high of Rs.64. February saw the stock hold steady at over Rs.60 for the most part, with a very small dip once, but the stock gained again. The stock closed at about Rs.61 for the month. March 2017 saw the stock move between Rs.63 and Rs.59. This trend lasted the entire month and the stock closed at about Rs.61 at the end of the month.
- April 2017 saw an upward tick in the prices of SAIL stock, that lasted for a week, culminating in a high of about Rs.67. The stock then went down, but never below about Rs.59. The stock remained over Rs.60 for the most part. The stock closed for the month at around Rs.60. In May, the stock largely fluctuated between Rs.59 and Rs.62. In the last week of May, the stock went down to Rs.56, closing for the month at about Rs.57. In June 2017, the stock remained between Rs.55 and Rs.58. The stock closed for the month at the latter price.
- July 2017 was a period of gain for the stock which did not go below Rs.60 that month, after crossing the Rs.60 mark in the first week. The stock had a high of around Rs.63 that month and it closed at around the same price. August saw steep fluctuations from Rs.63 to Rs.56, closing at about Rs.60 for the month. September saw the price remain at over Rs.60 for the most part. In the last week of the month, the stock dipped, closing at about Rs.53 which was also the lowest for that month and quarter.
- In October 2017, the stock remained over Rs.50 but less than Rs.60 for the most part. In the last week of the month, the stock rose to over Rs.60 with a high of about Rs.79 and closed at about Rs.78 for the end of the month. The stock held steady at around Rs.80 in November, with a high of about Rs.82. The stock closed for November at around Rs.76. In December 2017, the stock never dropped below Rs.75, and maintained an upward trend for the last two weeks of the month that resulted in a high of about Rs.92 around which price the stock closed for the month.
Should one invest in SAIL?
- SAIL is a Maharatna company, indicating that it is one of the best public sector companies to invest in.
- The company has produced a profit in the third quarter of the financial year 2017–2018, after a string of losses over a number of quarters. This indicates a strong change in performance.
- The company claims to have changed its processes in order to improve sales volumes, resulting in more profit. This is good news for investors.
- Currently, the company is in the process of modernising its facilities to better leverage green practices in technology.
- The company is expanding its iron ore mine capacities, and developing new mines.
- The company is also operating at about 103% of its total installed capacity.
- While all of these are indicators of good performance in the past and indicative of better performance in the future, it would be best to invest in SAIL stocks after personal research based on financial information and risk appetite.
SAIL is one of the largest state-owned steel producing companies. SAIL is a public sector undertaking by the Government of India. It is considered the 24th largest steel producer in the world. It has R&D Centre for Iron and Steel (RDCIS), Centre for Engineering and Technology (CET), Management Training Institute (MTI) and SAIL Safety Organisation (SSO). All of these are located in Ranchi, in India. It has a number of joint ventures with different companies around the globe. The Government of India owns about 75% of SAIL’s equity, thus retaining voting control of the company. It is a Maharatna company.
Hindustan Steel Limited (HSL) was established in 1954. Then, another new company called, Bokaro Steel Limited was incorporated in 1964. These two companies, in tandem with a few more companies were running all the steel production in India. The Ministry of Steel and Mines was managing them. The Ministry then suggested that one company be created as a holding company that would manage the inputs and outputs of all the steel plants under one roof. This suggestion led to the establishment of Steel Authority of India Limited. This company was incorporated in 1973 with an authorised capital of Rs.2,000 crore and it was to manage five integrated steel plants around the country. In 1978, SAIL was restructured as an operating company.
Mr. P K Singh is the Chairman of SAIL. Mr. Anil Kumar Chaudhary is the Director of Finance. There are four other Directors, Kalyan Maity, Dr. G. Vishwakarma, Raman, and Soma Mondal. There are ten Executive Directors and nineteen General Managers. The CVO is A J Kurian (IFS).
Mr. Prakash Kumar Singh is the Chairman of SAIL. He took up the post in the year 2015. He has a degree in Metallurgical Engineering from the Indian Institute of Technology (IIT) Rourkee, one of the most distinguished engineering colleges in India. He began his career at SAIL’s Bokaro plant. This was in the year 1980. During this time, he improved a number of things about the company. His ideas for changes were born out of his technological expertise in the industry. He eventually became the CEO of the Durgapur plant in 2012. He has received a number of awards and has also contributed to a number of technical papers based on the steel industry.
Shri Anil Kumar Chaudhary is the Director of Finance for SAIL. This is a position he has held from the year 2011. He was also part of the Bokaro Steel Plant. He joined the company in the year 1984 in the capacity of Junior Manager for finance and accounts. He has an LLB degree and a Post Graduate Diploma in Personnel Management. His credentials include being part of the Institute of Cost and Works Accountants of India (ICWAI) and the Institute of Company Secretaries of India (ICSI). He is also part of the faculty for a number of institutions.
SAIL’s shares are traded on the BSE and the NSE.
BSE: 500113; NSE: SAILEQ; ISIN code: INE114A01011; Sector: Iron and steel; Industry: Steel
Other than these, the company is also listed on the Bangalore Stock Exchange Limited, Cochin Stock Exchange Limited, et cetera.
SAIL also forms a part of indices like, the Nifty 100, Nifty LargeMidcap 250, S&P BSE 500, et cetera.
Ipsat Bhawan, Lodi Road, New Delhi – 110 003, India
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