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Showing posts from September 7, 2008

SAIL-BUY

Ongoing capex
Low leverage
Improving product mix
SAIL's ongoing capacity expansion programme, backward integration to source iron ore and its wide product mix and distribution reach favour investment in the stock.




The company is focusing on improving its product mix by increasing the proportion of value-added products.
C. N. M. Lavanya
Investors can consider buying the SAIL India stock, now trading at a price-earnings multiple of about 8.2 times its 2007-08 earnings. The valuation is at a discount compared to Tata Steel (9.4 times) and global steel majors. SAIL's ongoing capacity expansion programme, backward integration to source iron ore and its wide product mix and distribution reach, amid a good long-term demand environment for steel, favour investment in the stock.
Business Overview

SAIL has five integrated steel plants at Bhilai, Durgapur, Bokaro, Rourkela and Burnpur and special steel plants as well. SAIL's production capacity of 14 million tonnes (MT) is slated to i…