SAIL Share Price: The Steel Authority of India Limited (SAIL), a major steelmaking company, is currently under the lens with projections hinting at a significant slump in its stock value. Leading brokerage firm Kotak Institutional Equities recently released a report that painted a less than rosy picture for SAIL’s immediate future.
Upon the release of Kotak’s analysis, there has been observable pressure on the SAIL shares. As of 11 AM on October 5, 2023, the shares were trading around 89 rupees, reflecting this downward momentum.
SAIL Share Price Report Highlights
Kotak Institutional Equities has reduced SAIL’s price target to 50 rupees per share. Based on the current trading rates, this suggests a potential decrease of roughly 45%. The reasons outlined for this bearish outlook are multifaceted:
- High Operational Costs: One of the major challenges cited for SAIL share was its elevated operational costs combined with thinner margins.
- Rising Coking Coal Prices: The increasing prices of coking coal have exacerbated SAIL’s problems. Current market data indicates that spot coking coal prices have surged by 36% in the first quarter of the fiscal year. SAIL’s chairman, Amrendu Prakash, has previously expressed concerns regarding this, noting its direct impact on the company’s profit margins.
- European Carbon Tax: In a recent event, Prakash pointed out that the carbon tax regime in Europe will increase the cost of steel exports from India to European nations, further compressing margins.
Kotak’s report also touched upon other challenges such as a perceived decline in SAIL’s market share and growth prospects, making the company’s valuation seem expensive, especially considering the rising operational costs.
SAIL Share Price A Look at the Returns
Despite the gloomy outlook, it’s worth noting the stock’s performance in recent times:
- Over the past month, SAIL Share has seen a negative return of 12.48%.
- In the last three months, the return stood at 1.14%.
- From January 1 of the current year until now, SAIL has provided a return of 7.74%.
- On a yearly basis, the return from SAIL’s share is recorded at 11.87%.
- Impressively, over the span of three years, SAIL has given a whopping return of 153.34%.
While the immediate future for SAIL Share seems challenging due to various external and internal factors, it’s essential for investors to remember its long-term performance and make informed decisions.