India's SAIL posts drop in Q4 profit on softer steel prices, higher costs

FILE PHOTO: A motorcyclist rides past an advertisement of SAIL at a street in New Delhi

BENGALURU (Reuters) - Steel Authority of India reported a nearly 3% fall in fourth-quarter profit on Monday, hurt by softer steel prices and higher costs.

The state-owned firm's consolidated net profit for the quarter ended March 31 declined to 11.26 billion rupees ($135.22 million) from 11.59 billion rupees a year earlier.

Input costs rose about 2% to 151.30 billion rupees.

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KEY CONTEXT

Earnings of steelmakers in India have been under pressure due to higher imports from China that is selling finished steel products at cheaper prices, at a time when it's grappling with a struggling property sector and elevated U.S. tariffs.

A surge in costs of key steelmaking ingredients such as coking coal and iron ore in the quarter further hurt the metal makers.

Last week, India's JSW Steel also reported a fall in fourth-quarter profit.

JSW Steel and Tata Steel are looking to invest billions to ramp up capacity to meet rising steel demand in India as higher government spending ahead of the ongoing national elections boosts manufacturing and construction activity.

PEER COMPARISON

Valuation (next 12 Estimates (next 12 Analysts' sentiment

months) months)

RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div

growth growth rating* analysts price yield

target** (%)

Steel Authority of 18.92 8.38 9.07 62.62 Sell 11 1.57 0.75

India Ltd

Jindal Steel And Power 15.21 8.45 13.40 14.81 Buy 24 1.04 0.20

JSW Steel 14.30 8.11 10.75 45.57 Hold 26 1.04 0.37

Tata Steel 14.86 8.18 3.58 113.51 Hold 28 1.12 2.15

** Mean of analysts' ratings standardised to a scale of strong buy, buy, hold, sell, and strong sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

JANUARY-MARCH STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 83.2690 Indian rupees

(Reporting by Manvi Pant in Bengaluru; Editing by Shinjini Ganguli)