What is the Full Form of SAIL? – SAIL Full Form
The full form of SAIL is Steel Authority of India Limited. Steel Authority of India Limited (SAIL) is an Indian public sector steel manufacturing corporation based in New Delhi. It is a public sector unit (PSU) as the government owns 65% of its equity. SAIL is one of the largest steel-producing companies in India with a market capitalisation of Rs 50,578 crores (as on 7th September 2021). SAIL is one of the seven maharatnas of the Indian central PSUs. It produces steel and iron for domestic construction, defence industries as well as for exporting to the overseas market.
History of SAIL
- Prior to 1957 – Hindustan Steel (HSL) was formed to manage only one plant at Rourkela.
- April 1957 – Supervision and control of Bhilai & Durgapur plants was transferred to Hindustan Steel.
- 1964 – A new steel company, Bokaro Steel Limited, was formed to construct and operate the Bokaro steel plant.
- 1972-73 – Hindustan Steel’s total crude production capacity grew from 3.7 metric tonnes (MT) in 1968-69 to 4 MT in 1972-73.
- December 1972 – Ministry of Steel and Mines presented a new policy statement to the parliament to create a singular entity to manage steel production efficiently.
- January 1973 – Steel Authority of India Ltd was incorporated with an authorised capital of Rs 2,000 crores.
- 1978 – SAIL was restructured as an operating company.
SAIL Logo
Key Personnels at SAIL
- Smt. Soma Mondal- Chairman
- Ms. Sukriti Likhi- Additional Secretary and Financial Advisor
- Shri Puneet Kansal- Joint Secretary to the Government of India
- Shri Krishan Kumar Gupta- Independent Director
- Shri Amit Sen- Director (Finance)
- Shri. N. Shankrappa- Independent Director
Latest Shareholding Pattern of SAIL (As on 7th September 2021)
| Mar 2020 | Jun 2020 | Sep 2020 | Dec 2020 | Mar 2021 | |
| Promoters | 75% | 75% | 75% | 75% | 65% |
| Foreign Institutional Investors (FIIs) | 2.91% | 2.81% | 3.23 | 4.16% | 4.32% |
| Domestic Institutional Investors (DIIs) | 14.58% | 14.12% | 13.65% | 12.91% | 16.63% |
| Government | 0.06% | 0.06% | 0.06% | 0.07% | 0.07% |
| Public | 7.45% | 8.02% | 8.06% | 7.86% | 13.99% |
Latest Profit and Loss Account of SAIL (As on 7th September 2021)
| Mar 2018 | Mar 2019 | Mar 2020 | TTM | |
| Sales | 57,496 | 66,973 | 61,664 | 69,114 |
| Expenses | 53,619 | 57,167 | 51,400 | 56,375 |
| Operating Profit | 3,878 | 9,807 | 10,265 | 12,739 |
| OPM | 7 | 15 | 17 | 18 |
| Other Income | 1,484 | 283 | 280 | 1,387 |
| Interest | 2,823 | 3,155 | 3,487 | 2,817 |
| Depreciation | 3,066 | 3,385 | 3,756 | 4,103 |
| Profit before tax | -527 | 3,549 | 3,302 | 7,206 |
| Tax | 47 | 34 | 36 | 42 |
| Net Profit | -281 | 2,349 | 2,121 | 4,148 |
*(Figures in Rs. crores) [Read More: How to Read an Income Statement of a Company]
Latest Balance Sheet of SAIL (As on 7th September 2021)
| Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | |
| Share Capital | 4,131 | 4,131 | 4,131 | 4,131 |
| Reserves | 32,816 | 35,516 | 37,380 | 41,276 |
| Borrowings | 45,409 | 45,170 | 54,127 | 35,576 |
| Other Liabilities | 33,339 | 33,385 | 31,560 | 38,263 |
| Total Liabilities | 115,694 | 118,201 | 127,198 | 1,19,246 |
| Fixed Assets | 58,625 | 61,374 | 69,034 | 67,618 |
| Cwip | 18,395 | 16,014 | 8,753 | 8,881 |
| Investments | 2,629 | 2,975 | 3,240 | 3,442 |
| Other Assets | 36,044 | 37,838 | 46,170 | 39,305 |
| Total Assets | 115,694 | 118,201 | 127,198 | 1,19,246 |
| Inventories | 17,277 | 19,759 | 24,106 | 15,334 |
| Trade Receivables | 3,871 | 4,497 | 8,845 | 7,154 |
| Cash & Bank | 346 | 288 | 445 | 796 |
| Loans and Advances | 20,654 | 21,112 | 21,533 | 1,145 |
| Trade Payables | 7,527 | 7,225 | 6,322 | 7,015 |
*(Figures in Rs. crores) [Read More: How to Read a Balance Sheet of a Company]
Latest Key Financial Ratios of SAIL (As on 7th September 2021)
| Market Cap (Cr): 50,578 | Face Value (₹): 10 | EPS (₹): 22.45 |
| Book Value (₹): 110 | Roce (%): 11.3 | Debt to Equity: 0.86 |
| Stock P/E: 5.42 | ROE (%): 9.47 | Dividend Yield (%): 0.82 |
| Revenue (Cr): 58,707 | Earnings (Cr): 8,946 | Cash (Cr): 796 |
| Total Debt (Cr): 35,576 | Promoter’s Holdings (%): 75 |
Latest Mutual Funds Holdings & Trends of SAIL
| Schemes | Quantity | As on |
| ADITYA BIRLA SUN LIFE ARBITRAGE FUND – GROWTH | 10,767 | 31-08-2021 |
| ADITYA BIRLA SUN LIFE BALANCED ADVANTAGE FUND – GROWTH OPTION | 2,392 | 31-08-2021 |
| ADITYA BIRLA SUN LIFE EQUITY SAVINGS FUND REGULAR PLAN GROWTH | 2,218 | 31-08-2021 |
| BNP PARIBAS SUBSTANTIAL EQUITY HYBRID FUND REGULAR GROWTH | 724 | 31-08-2021 |
| BNP PARIBAS MUTUAL FUND LONG TERM EQUITY FUND GROWTH | 621 | 31-08-2021 |
| BNP PARIBAS FOCUSED 25 EQUITY FUND REGULAR GROWTH | 377 | 31-08-2021 |
| BNP PARIBAS DYNAMIC EQUITY FUND REGULAR GROWTH | 244 | 31-08-2021 |
| BNP PARIBAS CONSERVATIVE HYBRID FUND GROWTH | 151 | 31-08-2021 |
| UNION EQUITY SAVINGS FUND REGULAR PLAN – GROWTH | 70 | 31-08-2021 |
Valuation Analysis Of SAIL (As on 7th September 2021)
Valuation analysis helps you analyse how overvalued or undervalued a stock is using the margin of safety index. It is the difference between the intrinsic value and the current value of a share. Intrinsic value is the true value of a share. From the investor’s perspective – If the market price is significantly lower than the stock’s intrinsic value, the stock has a high margin of safety. It is a buy signal. From a seller’s point of view – If the market price is significantly higher than the intrinsic value, it is a short sell opportunity. SAIL has a high margin of safety
Latest Samco Stock Ratings of SAIL : 0.5 out of 5 Stars
PROS:
- Great Cash Conversion of Profits: SAIL is able to convert 165.86% of operating earnings into operating cash flow. This signals a great working capital cycle and large cash flows for either funding or dividends. This has a positive impact on SAIL’s shareholders.
CONS:
- Low Sustainable RoE: SAIL’s return on equity (ROE) is lower than the expected cost of capital. This means that the underlying business will destruct value over a period of time due to its inability to generate superior returns on capital.
- Low Return on Capital Employed: SAIL is unable to generate sufficient return on capital employed. This has affected its ability to generate high returns for shareholders after accounting for taxes, interest and other non-equity stakeholders.
- Low Interest Coverage: SAIL has a very low Interest coverage ratio of 2.94 times. This means that a large portion of operating profits is utilised to pay interest to debtholders. This leaves lower earnings and cash flows for equity shareholders.
- Highly Cyclical Industry: SAIL operates an extremely cyclical business with unpredictable earnings and cash flows. This can result in very high stock price volatility and returns which could negatively impact shareholder returns.
- Capital Intensive Business: SAIL operates an extremely capital intensive business with a low Asset turnover ratio of 0.81. A low asset turnover ratio negatively impacts RoE and reduces shareholder returns. Also due to the capital intensive nature of business, growth of the business would need to be funded either via increasing borrowings or diluting shareholding, both of which negatively impacts shareholder value and returns.
- Poor Working Capital Cycle: SAIL has a very poor working capital cycle of 139 days which requires very high investments in working capital. This reduces free cash flow generation for the business and negatively impacts shareholder value and returns.
- Extremely Speculative Stock: SAIL’s stock is extremely speculative in nature which is likely to work negatively to impact long term shareholders of the company.
- Low Shareholder Pedigree: SAIL has a very poor long term shareholder base and a large part of the shareholders are short term shareholders. This increases stock volatility and high speculative activity works negatively for long term shareholders of the company.
Competitor Analysis of SAIL (As on 7th September 2021)
| Company | Price (Rs.) | Market Cap (Rs. Cr) | EPS (Rs.) | P/E | D/E | ROE |
| Srikalahasthi Pipes Ltd | 208 | 984 | 33.14 | 6.36 | 0.21 | 7% |
| BMW Industries Ltd | 43.75 | 913 | -5 | 13.3 | 0.50 | 13.1% |
| JTL Infra Ltd | 815.05 | 866 | 25.32 | 32.2 | 0.89 | 28.2% |
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