Bonanza has recommended to buy Steel Authority of India on dips with a price target of Rs 125 in its April 09, 2009 research report.
“Steel Authority of India, SAIL is taking major expansion plan and is almost doubling its capacity to 26 million tonne. In FY 09 the margins and bottom line are affected due to high price of raw material and low price of steel. The margins will improve in FY 10 due to fall in price of raw materials. The company is trading at an earning multiple of 8.33x and 6.54 x on forward EPS of Rs 13.3 and Rs 16.9 for FY09 and FY10 respectively. We recommend investors a Buy On Dips. Investors can also look to add to their positions in around 90 for a target of Rs 125 in the medium term,” says Bonanza’s resesarch report.
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