SAIL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 3.1

📊 Financials: SAIL has a market cap of ₹52,003 Cr. Current price is ₹126 with a 52-week high/low of ₹146/₹99.2. PAT this quarter is ₹645 Cr vs ₹685 Cr in the previous quarter, showing decline. ROCE at 6.73% and ROE at 4.38% reflect weak efficiency. Debt-to-equity ratio of 0.60 indicates moderate leverage.

💹 Valuation: Stock P/E is 19.7, slightly below industry PE of 20.9, suggesting fair valuation. Book value is ₹136, giving a P/B ratio of ~0.93, which is attractive. PEG ratio at -0.47 indicates poor earnings growth relative to valuation. EPS is ₹5.85, showing profitability but under pressure. Dividend yield of 1.28% adds shareholder value.

🏭 Business Model: SAIL operates in steel production with integrated operations across mining, manufacturing, and distribution. Competitive advantage lies in scale, government backing, and domestic market presence. However, profitability is cyclical and sensitive to global steel prices and demand trends.

📈 Entry Zone: Technically, DMA 50 (₹133) and DMA 200 (₹129) are above current price, showing bearish trend. Entry is favorable near ₹120–₹125 if price consolidates. Current RSI at 36.5 indicates oversold conditions, offering potential accumulation opportunity.

🕰️ Long-Term Holding: Strong scale and government support provide stability, but weak return ratios and cyclical risks limit attractiveness. Investors should accumulate cautiously on dips closer to intrinsic value zones.

Positive

• ✅ Fair valuation (P/E 19.7 vs industry 20.9)
• ✅ Attractive P/B ratio (~0.93)
• ✅ Dividend yield of 1.28%
• ✅ DII holding increased (+0.80%)

Limitation

• ⚠️ Weak ROCE (6.73%) and ROE (4.38%)
• ⚠️ PEG ratio negative (-0.47)
• ⚠️ Quarterly PAT decline (685 Cr → 645 Cr)

Company Negative News

• 📉 FII holding reduced (-0.11%)
• 📉 Quarterly profit variation (-22.6%)
• 📉 Bearish technical trend (MACD -1.84)

Company Positive News

• 📈 DII inflows (+0.80%)
• 📈 Strong domestic presence and government backing

Industry

• 🏭 Steel industry PE at 20.9 highlights fair sector valuation
• 🏭 Sector supported by infrastructure and industrial demand

Conclusion

🔎 SAIL is fundamentally stable with fair valuation and government support, but weak return ratios and cyclical risks limit attractiveness. Entry zone lies near ₹120–₹125. Long-term investors can accumulate cautiously on dips, while monitoring profitability trends and global steel demand cycles.

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