Steel Authority of India Ltd (SAIL) is seen the best placed and cheapest steel stock, considering its strategically located integrated operations, having large land bank and captive iron ore mines. SAIL is one of the largest steel making company, with a capacity of over 15 MTPA, with five integrated plants at Bhilai, Bokaro, Rourkela, Durgapur and IISCO, making Long & Flat products, as also, Special Steel, with none of Indian Steel maker matching to its product range and profiles.
Four integrated Steel makers in India in listed space are, SAIL, JSW Steel, Jindal steel and Tata Steel. With fortunes of this sector changing, share price of all these 4 stocks also rose in last 2 months. From 1-11-2020, SAIL share price rose by 65%, Tata Steel by 50%, Jindal Steel by 35% and JSW Steel by 13%. Even Net Debt at SAIL is seen being the least at Rs. 30k cr, against Rs. 1 lakh cr of Tata Steel, Rs. 35k cr of JSW and Rs. 32k cr of Jindal Steel.
But no Experts or Media is seen talking of SAIL fundamentals, or any research report having initiated buy call on SAIL, over other Steel makers. Reason is obvious. SAIL being PSU, with no more goodies doled out to Media by Govt and MF and FIIs not largely invested in SAIL, are seen blowing trumpet of other 3 steel stocks.Even in a recent interview on a TV channel yesterday, of SAIL, was seen trying to put nefative forward like asking on OFS possibility.
Net Block of SAIL at Rs. 75K cr, as at 30-9-20, with gearing of 0.75x, with share ruling at PBV of 0.60x are having better margin of safety, over its peers. With sector now seeing clear tailwind, SAIL is now seen in accumulation for last couple of months. Once buying by the big players get completed, probably we may see Buy report, which will be supported by the Media then.
We won't be hesitant in saying that buy call was given by us on SAIL, on 23rd September, 2020, at Rs. 35.50 to our members in Member Zone.