SAIL Share price: Strong beat, net debt declines sharply, should further decline; risk-reward attractive says JP Morgan
SAIL reported a large operating beat in Q3. While JP Morgan increased their estimates sharply for FY21, JP Morgan broadly maintained our FY22-23 estimates (FY22 EBITDA/t at Rs7.4K/t vs. Rs12K/t in 3Q). JP Morgan expects net debt to decline further over the next few quarters. SAIL offers an attractive risk-reward at 0.5x P/B.
SAIL highlighted that trade level expectations of a price fall has impacted near-term steel demand (destocking) but the price reduction has only been in long products and there has been no price correction in flat products: Reuters