SAIL has shown a superb move from Rs 67-68 levels. Now Rs 91 will be a strong hurdle for this stock, cross over will take it to Rs 95-101 levels in very short time, says Sumit Bilgaiyan of Equity99.
Sumit Bilgaiyan
SAIL has posted highest EBITDA per tonne in 4QFY18 since FY11. We think this kind of realization will continue on back of better than expected China steel demand, continuing supply limits and falling inventories. SAIL’s management is targeting 28 percent volume growth in FY19. Capacity expansion from 12.5mt to 20mt is almost complete.
FY18 volumes rose 7 percent to 14mt; management expects 18mt in FY19, sharper acceleration in 2HFY19, close to rated production in two years.
Looking at sustained realization numbers and valuation of SAIL we are recommending a buy on dips. SAIL has shown a superb move from Rs 67-68 levels. Now Rs 91 will be a strong hurdle for this stock, cross over will take it to Rs 95-101 levels in very short time. Downside Rs 78-80 will be support zone for this stock. One can buy with stoploss of Rs 78.
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