SAIL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.2

📊 Core Financials Analysis

Profitability

Quarterly PAT dropped sharply (₹745 Cr vs ₹1,273 Cr), indicating earnings volatility.

ROE: 4.48% and ROCE: 6.72% are modest — not ideal for long-term compounding.

EPS: ₹7.35 — relatively low for a ₹126 stock.

Debt & Leverage

Debt-to-equity: 0.63 — moderate, manageable for a capital-heavy steel business.

No major red flags on solvency, but cyclical risks remain.

Dividend Yield: 1.59% — decent, but not a strong income play.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 17.1 Reasonable, but not cheap given low ROE

P/B Ratio ~0.88 Undervalued on asset basis (Price ₹126 / Book ₹143)

PEG Ratio -0.42 Negative due to earnings decline — signals caution

Intrinsic Value Likely < ₹126 Due to weak return metrics and earnings volatility

🧠 Business Model & Competitive Advantage

SAIL (Steel Authority of India Ltd.) is a leading PSU in steel production.

Strengths

Government backing

Large-scale infrastructure

Strategic role in national development

Weaknesses

Highly cyclical industry

Vulnerable to global commodity prices

Low margin and return profile

📌 Entry Zone Recommendation

RSI: 36.8 — oversold territory, potential bounce zone.

MACD negative — bearish momentum persists.

Support Range: ₹110–₹120 could be a good entry for value investors.

Avoid chasing above ₹135 unless earnings stabilize.

🕰️ Long-Term Holding Guidance

Hold only if seeking cyclical exposure or PSU turnaround.

Not ideal for long-term compounding due to weak ROE and volatile profits.

Monitor global steel demand, government infra push, and input cost trends.

Better suited for tactical trades than core portfolio holding.

Would you like a comparison with Tata Steel or JSW Steel for broader sector context?

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