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SAIL Q2FY18: Impressive Quarter; Valuation Prohibitive; Reduce - IndiaNotes.com
SAIL Q2FY18: Impressive Quarter; Valuation Prohibitive; Reduce
Reliance Securities | Published: 14 Nov, 2017  | Source : IndiaNotes.com

Looking ahead, we believe SAIL would report steady improvement on operational front amid improved outlook for global steel market led by increase in demand and supply measures in China. Despite SAIL’s modernisation plan and expected higher volume, going forward, we believe that it needs to continue effective cost cutting measures to be able to back in the black.


Notably, the stock has run-up sharply in recent times. At CMP, the stock trades at an expensive valuation of 8.3x FY19E EV/EBITDA. We downgrade our recommendation on the stock to REDUCE from HOLD with an unrevised Target Price of Rs51.


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About Reliance Securities

Reliance Securities, the broking arm of Reliance Capital, is one of the India’s leading retail broking houses, providing customers with access to equities, derivatives, currency, IPOs, mutual funds, bonds, and corporate FDs amongst others. The large array of financial offerings helps customers fulfilling their investment objectives on one platform. Focus on timely & error-free execution represents its core strength. Their best in class research offerings, high degree of compliance with stock exchange regulations, ethical business standards, & strong risk management capabilities; Reliance Securities positions itself amongst strong & innovative brands in the financial services space.


For more information please write in to editor@indianotes.com


Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.

 

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