The domestic steel giant reported an over 10-fold jump in its consolidated net profit at Rs 4,338.75 crore for the second quarter ended September 30, 2021. The company had posted Rs 436.52 crore net profit in the year-ago quarter.
Following the update, shares of SAIL surged over 13 per cent to Rs 130.35, before paring some gains to trade at Rs 127.95 around 10.00 am. It had settled at Rs 115 on Friday. BSE barometer and benchmark Sensex was trading 463 points or 0.78 per cent at 59,780 at the time of writing this report.
During the July-September period, the company said its total consolidated income also increased to Rs 27,007.02 crore, from Rs 17,097.57 crore in the corresponding quarter of the previous fiscal.
On a standalone basis, the company posted a net profit of Rs 4,303.62 crore during the quarter, whereas its total standalone income rose to Rs 27,057.53 crore from Rs 17,121.22 crore in the same period last fiscal.
In a separate statement, SAIL said it produced 4.468 million tonnes (MT) crude steel during the quarter under review and sold 4.280 MT of steel.
However, the company, which announced an interim dividend of Rs 4 per share, has received mixed reviews from brokerages following the results for Q2FY22.
Brokerage firm Edelweiss has given it a ‘buy’ rating with a target price of Rs 170 as it expects the company to benefit from lower debt. Despite the near-term cost headwinds, the brokerage expects SAIL to have an edge after significant debt reduction.
On the other hand, ICICI Securities has given a ‘sell’ rating on the company, with a target price of Rs 99 as it sees risks in the actualisation of the guidance. Also, higher coking coal prices will likely severely impair EBITDA performance, it said.
“Higher sales allowed for better working capital management in H1FY22 with Rs 2,200 crore of working capital release,” it added.
Shares of SAIL have soared more than 275 per cent in the last one year. However, recently, they have been under pressure following the selloff in the secondary markets.
