Steel Authority of India Ltd (SAIL), the country’s largest steel manufacturing entity, witnessed a significant decline in its financial performance for the October-December 2023 quarter.
The state-owned company reported a 22 per cent decline in its consolidated net profit, which stood at Rs 422.92 crore, compared to the net profit of Rs 542.18 crore recorded in the same quarter of the last year. This decline was attributed to a decline in total income, which fell to Rs 23,492.33 crore from Rs 25,140.16 crore year-on-year.
Despite the slowdown in the third quarter, SAIL had earlier posted robust growth with a 13% increase in consolidated operating revenue to Rs 29,712 crore in Q2FY24 and consolidated net profit of Rs 1,306 crore for the quarter. ending September 30, 2023. Previous earnings were supported by strong domestic demand and reduced input costs.
However, the company’s stock performance remained upbeat, with SAIL stock rising 40% in three months and hitting its 52-week high. Experts have advised short-term traders to buy the shares for a target of Rs 145 in the next 6-7 weeks.
Despite this, analysts have suggested a long-term average target price for SAIL shares at Rs 93.12, indicating a potential downside of -30.33% from the last traded price of Rs 133.65.
The Board of Directors declared an interim dividend of Re 1 per equity share for FY24, setting February 20 as the record date for payment of this interim dividend. This decision comes in a difficult global economic context which has had an impact on steel prices and steelmakers’ margins. However, with the Indian government’s increased focus on capital expenditure in the infrastructure sector, domestic steel consumption is expected to increase in the short to medium term.
Read also: Coal India Q3 Results: Profit stands at Rs 9,069 cr, interim dividend of Rs 5.25 per share announced
