Steel Authority of India (SAIL) share price gained 2 percent intraday on September 17 after Citi upgraded the stock to buy.
The global research firm has raised the target to Rs 50 from Rs 40 per share. It is of the view that better realisations, improving demand and rising volumes augur well for the company, according to a CNBC-TV18 report.
The company's net debt-to-EBITDA would likely improve in FY21 and Citi expects it to be profitable in FY22. The firm has raised its EBITDA estimates for SAIL by 64 percent for FY21, 16 percent for FY22 and 22 percent for FY23, it added.
The stock was trading at Rs 38.90, up Rs 0.85, or 2.23 percent. It has touched an intraday high of Rs 39.50 and an intraday low of Rs 37.90.
The domestic steel major on September 14 posted a consolidated net loss of Rs 1,226.47 crore for the first quarter ended June 30, mainly on account of reduced income. The company had posted Rs 102.68 crore net profit in the year-ago quarter, SAIL told the BSE.
During the quarter, the company said its net profit declined to Rs 9,346.21 crore from Rs 14,998.20 crore in the April-June period of the previous fiscal. Its total income stood at Rs 11,325.10 crore against Rs 14,893.07 crore a year ago.
Morgan Stanley maintained its 'underweight' call on the stock, with the target at Rs 43 per share. It is of the view that the cost of production will come down with lower coking coal prices, adding that there could be benefit from operating leverage of Rs 4,000-5,000 per tonne.
It is of the view that EBITDA per tonne could improve to Rs 8,000- 9,000 per tonne QoQ if prices remain stable.
Moneycontrol technical rating is neutral with moving averages being neutral and technical indicators being bearish.
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