The stock of Steel Authority of India (SAIL) has fallen by about 13 per cent in the last one month, in line with the decline in the share prices of other steel companies. Sliding steel prices all over the world are exerting pressure on steel stocks. The average Chinese hot-rolled coil steel prices — a benchmark for global steel prices — fell more than 10 per cent from October 2018. The fall in prices may have been due to the lower-than-anticipated winter capacity shutdown in China. Increase in net imports from neighbouring countries is also a negative for the Indian steel industry.

But SAIL’s financials have been looking up. In the latest September quarter, SAIL’s revenue increased 23 per cent Y-o-Y to ₹16,718 crore due to improved realisations. The realisations grew by 20 per cent to ₹48,000 per tonne from year ago levels. Also, the company had a remarkable improvement in its operating margins, which more than doubled to 15 per centY-o-Y.

 

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