Steel Authority of India on Tuesday (May 4, 2021) regained its market capitalization of over Rs. 50000 crore as the steel company surged a huge over 74% in 1.5 months time from a price of Rs. Rs. 76.7 to Rs. 133.5 currently. This is on anticipation of strong results for the quarter ended March and robust outlook for the sector.
On the surge, the scrip of SAIL has entered the club of 100 most valued companies on the based on market capitalization. As at around 12:09, on the NSE, the scrip of SAIL commanded a m-cap of Rs. 55101 crore.
On the BSE, the stock hit a 9-year high price of Rs. 135.6 per share. The stock is trading at its highest levels since July 2011.
The company's consolidated PAT for the nine months period to FY21 stood at Rs. 406 crore versus Rs. 704 crore during the same period of FY20. For the last quarter of FY21, the company has logged best quarterly performance both in terms of production as well as sales.
"The multipronged strategy has helped us top the performances during the month, quarter, as well as, the year. The team effort by the SAIL employees helped in seizing the opportunity offered by the pick-up in the economic activities in the country especially the steel-intensive •sectors like infrastructure, construction, automobiles, etc," the management said.
Analysts at Motilal Oswal Financial Services believes SAIL to be the best play on higher steel prices as it is backward integrated with captive iron ore, has a higher operating leverage due to high conversion cost, and has a higher financial leverage. With limited capex, higher pricing should drive significant deleveraging and boost equity value.