Shares of Steel Authority of India Ltd (SAIL) surged 13 per cent to hit an intraday high of Rs 130.35 on the Bombay Stock Exchange (BSE) after the domestic steel giant reported its earnings for the quarter ended September 2021.
The stock opened 7 per cent higher at Rs 123.40 against the previous close of Rs 115 on the BSE.
The large-cap stock has delivered more than 250 per cent return to its shareholders in the last 12 months. In the past one year, the share price jumped from Rs 34 to Rs 130.35 mark -- logging around 283 per cent return in this period.
With a market capitalisation of more than Rs 51,000 crore, the share stands higher than 5-day, 10-day, 20-day, 50-day, 100-day, and 200-day moving averages.
The company reported a net profit of Rs 4,338.75 crore for the July-September quarter, recording an over 10-fold jump on a year-on-year basis. Profit in the year-ago period stood at Rs 436.52 crore. The company's total income grew 58 per cent year-on-year to Rs 27,007 crore.
JP Morgan has upgraded the stock to overweight and has raised target to Rs 165 from Rs 150 per share. The research firm believes that after the third quarter, costs should fall even as volumes and prices should be stable to higher in the second half.
According to IDBI Capital, the company's Q2 FY22 result was ahead of expectations backed by strong improvement in realizations. The brokerage firm believes that rising coking coal price will impact its operating margin in the near term and has a target price of Rs 161 per share.
Systematix Institutional Research noted that the biggest risk to SAIL would be the government's measures to change it into a milch cow through levies, as has been the case with several other PSUs in India. It has a 'Buy' rating on the stock and has a target price of Rs 182 per share.
During the quarter, its expenses stood at Rs 21 304.64 crore compared to Rs 16,733.29 crore in the year-ago period. The company's board also approved an interim dividend of Rs 4 per share for the current fiscal year.
"Gross borrowings were at Rs 22,478 crore as on September 30, 2021, against Rs 35,350 crore as on March 31, 2021, which is a reduction of Rs 12,872 crore during H1 FY'22 (financial year 2021-22)," the company said.
In a separate statement, SAIL has said it produced 4.468 million tonnes (MT) of crude steel during the quarter under review and sold 4.280 MT of steel.
In October 2021, Life Insurance Corporation of India (LIC) had offloaded 82,802,533 equity shares or 2.01 per cent stake in SAIL. Post this transaction, LIC's stake in the company decreased to 6.68 per cent from 8.69 per cent.
SAIL is one of the largest steel-making companies in India and one of the Maharatna public sector undertakings. It produces iron and steel at five integrated plants and three special steel plants, located principally in India's eastern and central regions and situated close to domestic sources of raw materials.
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