12 June 2021
4QFY21 Results Update | Sector: Metals
SAIL
Estimate change
TP change
Rating change
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CMP: INR135
TP: INR185 (+37%)
Buy
Biggest beneficiary of improved pricing
Deleveraging to remain strong
Bl oomberg
Equi ty Sha res (m)
M.Ca p.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel . Per (%)
12M Avg Va l (INR M)
Free fl oa t (%)
SAIL IN
4,130
557.8 / 7.6
151 / 29
-11/120/294
4297
35.0
SAIL continues to reap the benefits of higher steel prices as 4QFY21 EBITDA
grew 21% QoQ, despite a wage revision impact. In the absence of
significant capex, net debt declined further to INR366b (v/s INR538b in
Mar’20).
With steel prices at a record high, SAIL is poised to post its best ever
EBITDA/t of ~INR20,000 in 1QFY22. We upgrade our FY22E/FY23E EBITDA
estimate by 71%/33% to factor in higher steel prices, and estimate a further
INR102b (INR25/share) fall in net debt to INR265b (1x EBITDA) in FY22E.
We expect dividend payout to be strong at INR10/share in FY22E (7.5%
yield), based on an expected 25% payout ratio. Reiterate
Buy.
Sales/EBITDA/adjusted PAT rose 17%/21%/39% QoQ in 4QFY21 to
INR232.9b/61.5b/35.7b and was 1%/9%/11% below our estimate.
Blended realization grew only INR5718/t QoQ (v/s 8-10k/t for peers) to
INR53,531/t (est. INR55,273/t), due to weaker mix and sales to railways
(~10% of volumes) made at lower provisional prices.
Employee cost was higher at INR40.7b (est. INR36.3b) v/s INR23.4b in 3Q
due to an INR11.6b provision for wage revision in FY21. As a result,
EBITDA/t stood at INR14,145/t (+16% QoQ) on a reported basis and at
INR16,802/t (+37% QoQ) adjusted for a wage revision provision.
Sales volume stood at 4.35mt, up 5% QoQ/16% YoY.
Finance cost fell 19% QoQ to INR5.4b due to debt repayments.
Consolidated revenue/EBITDA stood at INR691.1b/INR127.4b in FY21, up
12%/123% YoY on higher EBITDA/t of INR8,526/t (+112% YoY). Adjusted
PAT stood at INR54.5b v/s a loss of INR1.9b in FY20.
Higher FCF leads to net-debt reduction:
Led by strong OCF at INR234b
(higher EBITDA and working capital release of INR100.6b) and lower capex
at INR35.3b (-20% YoY), FCF rose to INR199b (v/s INR49.9b in FY20). This
helped lower net debt by INR167b YoY (INR76.8b QoQ) to INR366b in
Mar’21. Net debt/EBITDA ratio declined to 2.9x, the lowest since FY12.
Volume guidance:
Despite a production loss in Apr-May’21, SAIL has guided
at steel/iron ore sales of 18.3mt/13.5mt in FY22 (v/s 14.9mt/3.2mt in
FY21). We have factored in sales of 16.6mt in FY22.
Pricing remains strong in Jun’21:
Steel realization remains strong in Jun’21,
with flats/longs NSR in Jun’21 being higher by ~INR10,000/INR5,500 per
tonne over Mar’21 at INR63,500/INR50,500 per tonne.
EBITDA up 21% QoQ despite a wage revision hit
Financials & Valuations (INR b)
Y/E MARCH
2021 2022E 2023E
Sa l es
EBITDA
Adj. PAT
EBITDA Ma rgin (%)
Cons . Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
Ratios
Net D:E
RoE (%)
RoCE (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA(x)
FCF Yi eld (%)
10.3
1.2
7.3
0.1
3.5
1.0
3.0
0.2
5.3
0.9
3.9
0.2
691.1 919.0 867.5
127.4 269.8 193.3
54.1 159.1 105.7
18.4
13.1
29.4
38.5
22.3
25.6
na 194.3
-33.5
109.9 138.0 153.1
0.8
12.4
10.7
0.5
31.1
26.1
0.3
17.6
16.4
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-21 Dec-20 Mar-20
65.0
16.7
4.3
14.0
75.0
13.0
4.2
7.9
75.0
14.6
2.9
7.5
Conference call takeaways – Profitability to improve on higher NSR
FII Includes depository receipts
Amit Murarka - Research analyst
(Amit.Murarka@motilaloswal.com)
Research analyst - Basant Joshi
(Basant.Joshi@motilaloswal.com);
Jayant Gautam
(Jayant.Gautam@motilaloswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
SAIL
Valuation and view
Despite factoring in a conservative realization (~15% discount to spot) and
higher coking coal prices (USD165/t CNF India) in FY22E, we estimate SAIL’s
EBITDA to grow by over 100% YoY to INR270b.
We estimate a further INR102b (INR25/share) fall in net debt to INR265b (1x of
EBITDA) in FY22E on the back of higher operating cash flows.
We value the stock at 5x FY23E EV/EBITDA at INR185/share, implying a target
P/B of 1.2x (v/s its historical average of 0.7x). Reiterate
Buy.
Standalone quarterly performance – INR b
Y/E March
Sa l es (mt)
Cha nge (YoY %)
Rea lization (INR/t)
Cha nge (YoY %)
Net Sales
Cha nge (%)
NSR to RM Sprea d (INR/t)
EBITDA
EBITDA/t (INR)
Interest
Depreciation
Other Income
PBT (before EO Inc.)
EO Income (exp.)
PBT (after EO Inc.)
Tota l Tax
% Ta x
Reported PAT
Adjusted PAT
Cha nge (YoY %)
1Q
3.2
-0.7
45,614
-6.2
148.20
-6.8
24,841
15.82
4,869
7.88
8.72
1.83
1.04
1.04
0.35
33.8
0.69
0.69
-90.5
FY20
2Q
3Q
3.1
4.1
-9.4
26.4
44,878 40,443
-6.7
-17.3
141.27 165.41
-15.5
4.5
24,712 18,495
11.60
9.98
3,684
2,439
9.40
8.49
9.01
9.26
1.59
1.87
-5.23
-5.91
-5.23
-1.80
34.5
-3.43
-3.43
-159.5
-5.91
-1.62
27.4
-4.30
-4.30
-168.0
4Q
1Q
3.7
2.2
-9.4
-31.1
43,194
40,534
-3.6
-11.1
161.72
90.67
-12.6
-38.8
26,930
22,562
19.54
-4.03
5,218
-1,801
9.09
8.86
10.55
9.73
4.57
2.78
4.47
-19.85
37.34
41.81
-19.85
14.56
-7.14
34.8
36.0
27.25
-12.70
2.91
-12.70
-42.2 -1,945.2
FY21
2Q
3Q
4Q
4.2
4.1
4.4
33.6
1.4
16.2
40,237 47,813 53,531
-10.3
18.2
23.9
169.24
198.3
232.9
19.8
19.9
44.0
19,483 29,694 37,119
19.00
50.8
61.5
4,518 12,241 14,145
7.20
6.7
5.4
9.90
9.8
11.6
1.98
2.2
3.2
3.88
36.4
47.7
2.22
0.0
-1.7
6.10
36.4
46.1
2.17
23.6
11.6
35.6
64.8
25.3
3.93
12.8
34.4
2.50
25.7
35.7
-172.9
-698.7
1,124.9
FY20
FY21
FY21E
4QE
4.3
14.0
55,273
28.0
236.0
45.9
37,427
67.9
15,913
6.4
9.9
2.2
53.9
Var.
(%)
2
-3
-1
14.2
14.9
0.8
5.0
43,328 46,255
-8.7
6.8
616.61
691.1
-7.9
12.1
23,538 27,913
56.93
127.3
4,000
8,519
34.87
28.2
37.55
41.0
9.85
10.1
-5.64
68.2
37.34
0.6
31.71
68.8
53.9
11.49
30.3
14.0
36.2
44.0
26.0
20.22
38.5
39.9
-4.12
51.2
39.9
-116.9
-1,341.7
1,268.7
-9
-11
-11
-14
-14
-11
Quarterly per tonne trend
Average revenue (INR/t)
Costs/t of sales (INR)
Inc. (-)/Dec. i n stock a nd ca ptive cons.
Cons umption of Raw Materials
Sta ff cost
Others
Gross Margin/t of sales
Conversion cost/t of sales
EBITDA/t of sales
1QFY20
45,614
-4,243
25,016
6,298
13,675
24,841
19,972
4,869
2QFY20
43,515
-3,285
23,451
6,223
14,805
23,349
21,028
3,684
3QFY20
40,443
4,742
17,206
4,950
11,106
18,495
16,056
2,439
4QFY20
43,194
-1,540
17,804
7,350
14,362
26,930
21,712
5,218
1QFY21
40,534
-1,518
19,490
8,909
15,453
22,562
24,362
-1,801
2QFY21
40,237
7,029
13,725
4,847
10,117
19,483
14,964
4,518
3QFY21
47,813
2,433
15,686
5,650
11,804
29,694
17,454
12,241
4QFY21 QoQ (%) YoY (%)
53,531
12
24
1,477
14,935
9,358
13,616
37,119
22,974
14,145
-39
-5
66
15
25
32
16
-196
-16
27
-5
38
6
171
12 June 2021
2
 Motilal Oswal Financial Services
SAIL
Highlights from the management interaction
During 4QFY21, it sold ~1.45mt of iron for INR5.75b, implying a realization of
INR3,966/t of iron ore. This contributed ~INR1,322/t to steel realization. We
estimate an EBITDA of INR3.6b from iron ore sales.
Hot metal/crude steel/saleable steel production rose 4%/4%/6% QoQ to
4.98/4.56/4.42mt in 4QFY21.
Volume guidance:
Despite a production loss in Apr-May’21, SAIL has guided at
steel/iron ore sales of 18.3mt/13.5mt in FY22 (v/s 14.9mt/3.2mt in FY21). We
have factored in sales of 16.6mt in FY22.
Pricing remains strong in Jun’21:
Steel realization remains strong in Jun’21, with
flats/longs NSR in Jun’21 being higher by ~INR10,000/INR5,500 per tonne over
Mar’21 at INR63,500/INR50,500 per tonne. Realization improvement in 4QFY21
was lower compared to peers due to an adverse product mix.
Expect steel demand to remain robust from Jul’21:
The management does not
expect seasonality to impact demand and sees robust demand from Jul’21.
Partly realized receivables from Railways in Mar’21:
SAIL partly realized
receivables from Railways during 4QFY21. The same stood at INR35b in Mar’21
v/s INR69b in Dec’20. In Jun’21, it stood at INR45b. This includes receivables of
2-3 months and escalation claims.
Inventories to remain stable in FY22:
The management expects working capital
to remain stable as it expects inventories to remain stable ~INR150b (excluding
iron ore inventories). Finished steel inventories stood at 0.7mt in Mar’21 (16
days of sales).
Employee cost guided flat in FY22:
Employee cost was higher at INR40.7b in
4QFY21 due to an INR11.5b provision for wage revision and higher performance
related pay. The management has guided at flat employee cost YoY at INR105b.
Increase in coking coal may lead to higher costs:
Lower coking coal prices
(INR11,200/t, down 21% YoY) led to cost savings of INR43b (one-third of
EBITDA) in FY21. While the cost of coking coal has increased by USD50/t in the
last two months, the management expects it to cool down. Higher coking coal
prices, if it sustains, would impact cost significantly.
Deleveraging to continue:
Net debt declined further to INR366.3b (down
INR76.8b QoQ), much lower than peak debt of INR538b as of Mar’20. The
management expects to lower debt to sub-INR250b levels in FY22.
Capex guidance:
As per the government’s directive, SAIL is required to spend
INR80b on capex in FY22. However, the management expects capex spend to
remain below the same as there are no ongoing projects.
Management confident of entry tax liabilities not materializing:
In 4QFY21,
SAIL paid INR1.6b towards disputed entry taxes under the amnesty scheme. At
the end of FY21, it had disputed entry tax liabilities of INR13.7b (not provided
for). However, the management does not expect it to materialize as the claims
by authorities are not tenable in its view.
12 June 2021
3
 Motilal Oswal Financial Services
SAIL
Valuation and view
Volume growth to take care of higher fixed cost:
While employee cost has risen
by ~20% in FY21 on account of wage revisions, we expect the impact to be
absorbed by volume growth and higher realization.
Around 23% EBITDA CAGR over FY21-23E:
Despite factoring in a conservative
realization (~15% discount to spot) and higher coking coal prices (USD165/t CNF
India) in FY22E, we estimate EBITDA to grow by over 100% YoY to INR270b.
Net leverage to decline sharply:
We estimate a net debt reduction of INR164b
(INR40/share) to INR202b (INR49/share) over FY21–23E on the back of higher
operating cash flows. With a significant debt reduction and higher earnings, net
debt/EBITDA should decline to ~1x by Mar’23E.
Valuation remains comfortable:
At the CMP, the stock is trading at 3.9x FY23E
EV/EBITDA and 0.9x P/B. We value the stock at 5x FY23E EV/EBITDA at
INR185/share, implying a target P/B of 1.2x. Reiterate
Buy.
Exhibit 1: Target price calculation
Y/E March
Sa l es (mt)
EBITDA (INR per tonne)
EBITDA (INR b)
Ta rget EV/EBITDA(x)
Ta rget EV (INR b)
Les s: Net Debt (INR b)
Equi ty va lue (INR b)
Target price (INR/share)
FY18
14.1
3,705
52.2
FY19
14.1
6,916
97.6
FY20
14.2
4,012
57.1
FY21
14.9
8,526
127.4
FY23E
17.5
11,045
193.3
5.0
966.4
366.3
264.7
202.5
763.9
185
Source: MOFSL, Company
FY22E
16.6
16,251
269.8
450.6
448.8
533.6
Exhibit 2: Raise our FY22E/FY23E EBITDA estimate by 71%/33%
INR b
Sa l es (mt)
Rea lization/t (INR)
EBITDA/t (INR)
Revenue
EBITDA
PAT
Net debt
Ta rget price (INR)
Revised
FY22E
FY23E
16.6
17.5
55,357
49,571
16,241
11,035
919.0
269.8
159.1
264.7
867.5
193.3
105.7
202.5
185
Old
FY22E
16.6
48,778
9,499
809.8
157.8
76.5
350.9
106
FY23E
17.5
47,071
8,283
823.8
145.1
69.4
309.3
Change (%)
FY22E
FY23E
0.0
0.0
13.5
5.3
71.0
33.2
13.5
70.9
107.9
-24.6
5.3
33.2
52.3
-34.5
74
Source: MOFSL
Spot steel price implying significant upside
SAIL’s earnings sensitivity to prices is the highest among steel companies. Every
INR1,000/t of higher steel prices improves SAIL’s FY23E EBITDA/EPS by 9%/13%.
At the same time, valuations rise by 13%.
If we assume spot steel prices to sustain in FY23E, it would imply an upside of
100% to our base case EBITDA and a 142% upside to our valuation of
INR185/share.
12 June 2021
4
 Motilal Oswal Financial Services
SAIL
Exhibit 3: SAIL’s earnings are highly sensitivity to a change in realization
Base case
INR b
Revenue
EBITDA
PAT
Net debt
Vol ume (mt)
Rea lization/t
EBITDA/t
TP (5x EV/EBITDA)
FY22E
919.0
269.8
159.1
264.7
16.6
55,357
16,241
FY23E
867.5
193.3
105.7
202.5
Sensitivity over
INR1,000/t
FY23E Change (%)
885.0
2
210.8
9
119.3
13
191.1
-6
0
2
9
13
Bull case - spot
FY23E Change (%)
1,060.0
22
385.8
100
254.4
141
77.2
-62
17.5
60,571
22,035
448
0
22
100
142
Source: MOFSL
17.5
17.5
49,571 50,571
11,035 12,035
185
209
Exhibit 4: EBITDA above FY08 levels; interest coverage ratio and net leverage improving sharply
SAIL
EBITDA
Net debt
Net debt-to-EBITDA (x)
Interest paid
Interest coverage ra tio (x)
RoE (%)
FY08
125.9
-100.5
na
3.4
55.7
41.7
FY09
86.8
-98.2
na
2.8
43.1
24.2
FY12
FY15
FY16
FY17
FY18
FY19
FY20
FY21 FY22E FY23E
64.0
49.0
-29.0
0.7
52.2
97.6
57.1 127.4 269.8 193.3
107.0 279.7 348.0 410.2 450.6
448.8 533.6 366.3 264.7 202.5
1.7
5.7
na
-
8.6
4.6
9.3
2.9
1.0
1.0
7.2
15.0
23.0
25.3
28.5
33.1
36.5
29.4
17.9
13.7
10.3
3.8
-1.0
0.2
2.0
3.3
1.9
4.8
15.5
14.8
9.7
4.9
-9.9
-7.1
0.3
6.8
-0.5
12.4
31.1
17.6
Source: Company, MOFSL; Int. coverage ratio (interest cost/EBITDA including other i ncome)
12 June 2021
5
 Motilal Oswal Financial Services
SAIL
Story in charts
Exhibit 5: Volumes to grow ~8% CAGR over FY21-23E
Sales (m tons)
Vol growth (%)
11.1
Exhibit 6: Realization to remain strong over FY22-23E
(INR/t)
47,444
5.4
40,877
43,328
46,255
55,357
49,571
8.6
7.1
14.1
14.2
14.9
5.0
33,814
13.1
14.1
0.2
0.8
16.6
17.5
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 7: EBITDA to grow ~23% CAGR over FY21-23E
EBITDA (INR b)
EBITDA per ton
16,241
0.4
6,896
3,693
4,000
97.3
56.9
127.3
269.6
193.1
Exhibit 8: Cash flows to remain high over FY22-23E
IINR b
OCF
FCF post finance cost
11,035
8,519
22
234
213
179
170
135
62
72
0
-58
-33
95
-6
-87
29
52.0
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 9: Net debt to decline; leverage to fall to 1x
Net Debt (INR b)
8.6
9.3
Net Debt/EBITDA (RHS)
Exhibit 10: Returns ratios to remain high over FY22-23E
RoE
RoCE (pre-tax)
26.1
366
4.6
2.9
1.0
265
202
1.0
-7.1
FY21
FY22E
FY23E
Source: Company, MOFSL
-2.9
0.3
8.6
31.1
16.4
17.6
12.4
6.8
-0.5
10.7
3.3
3.4
410
FY17
451
FY18
449
FY19
534
FY20
Source: Company, MOFSL
12 June 2021
6
 Motilal Oswal Financial Services
SAIL
Financials and valuations
Income Statement (Consolidated)
Y/E March
Net Sales
Cha nge (%)
EBITDA
Cha nge (%)
EBITDA per tonne (INR)
Depreciation
EBIT
Interest
Other i ncome
PBT before EO
Extra ordi nary Item
PBT
Tota l Tax
Effecti ve Rate (%)
Reported PAT
Cha nge (%)
Sha re of Associates/JV
Mi nori ty Interest
Adjusted PAT
Cha nge (%)
Balance Sheet (Consolidated)
Y/E March
Sources of Funds
Sha re Ca pital
Res erves a nd Surplus
Shareholders’ funds
Loa ns
Deferred Tax Liability
Mi nori ty Interest
Capital Employed
Application of Funds
Gros s Fixed Assets
Les s: Depreciation
Net Fixed Assets
Ca pi tal WIP
Investments
Curr. Assets
Inventory
Sundry Debtors
Ca s h a nd Bank Balances
Other a ssets
Loa ns a nd Advances
Current Liabilities
Sundry Creditors
Other Current Li abilities
Provi s ions
Net Current Assets
Application of Funds
FY17
445.0
13.8
0.7
-102.3
51
26.8
-26.1
25.3
4.5
-46.9
-2.2
-49.1
-19.6
39.9
-29.5
-28.8
1.9
0.0
-26.3
-37.1
FY18
575.6
29.3
52.2
7,677.0
3,705
30.7
21.5
28.2
4.2
-2.6
-5.6
-8.1
-2.5
30.2
-5.7
-80.8
2.8
0.0
1.1
-104.0
FY19
669.7
16.4
97.6
87.1
6,916
33.9
63.8
31.5
4.9
37.2
-3.9
33.3
12.0
36.1
21.3
-475.4
2.2
0.0
26.0
2344.1
FY20
616.6
-7.9
57.1
-41.5
4,012
37.6
19.5
34.9
9.1
-6.3
37.3
31.1
11.8
38.0
19.3
-9.4
1.9
0.0
-1.9
-107.5
FY21
691.1
12.1
127.4
123.1
8,526
41.0
86.4
28.2
8.6
66.8
0.6
67.4
30.6
45.4
36.8
91.1
4.7
0.0
54.1
-2880.6
FY22E
919.0
33.0
269.8
111.8
16,251
47.3
222.4
17.9
7.8
212.4
0.0
212.4
55.2
26.0
157.1
327.0
1.9
0.0
159.1
194.3
(INR b)
FY23E
867.5
-5.6
193.3
-28.3
11,045
48.0
145.3
13.7
8.7
140.3
0.0
140.3
36.5
26.0
103.8
-34.0
1.9
0.0
105.7
-33.5
(INR b)
FY23E
41.3
591.1
632.4
274.3
51.9
0.0
958.6
1,308.2
577.3
730.9
68.8
34.4
213.9
71.3
71.8
109.8
18.7
107.0
188.2
65.7
124.5
958.6
FY17
41.3
329.1
370.4
414.0
-38.5
0.0
745.9
841.9
338.9
503.0
232.8
24.8
157.4
29.3
3.8
81.4
5.3
52.3
174.3
65.2
-14.6
745.9
FY18
41.3
328.2
369.5
454.1
-41.6
0.0
781.9
955.8
369.6
586.3
184.0
26.3
170.2
38.7
3.5
98.7
5.2
75.3
192.7
62.9
-14.6
781.9
FY19
41.3
355.2
396.5
451.7
-28.7
0.0
819.5
1,017.2
403.4
613.7
160.1
29.7
195.1
45.0
2.9
98.1
6.2
72.3
192.9
66.1
15.9
819.5
FY20
41.3
373.8
415.1
538.0
-20.2
0.0
932.9
1,131.3
441.0
690.3
87.5
32.4
238.4
88.4
4.5
100.4
7.1
63.3
188.1
64.7
122.6
932.9
FY21
41.3
412.8
454.1
374.3
13.3
0.0
841.7
1,158.2
482.0
676.2
88.8
34.4
195.7
71.5
8.0
109.8
8.1
70.2
214.8
65.7
42.3
841.7
FY22E
41.3
528.6
569.9
314.3
36.6
0.0
920.8
1,238.2
529.3
708.9
68.8
34.4
226.6
75.5
49.6
109.8
14.4
113.3
188.2
65.7
108.7
920.8
12 June 2021
7
 Motilal Oswal Financial Services
SAIL
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Ca s h EPS
Book Va lue per Share
Di vi dend Per Share
Valuation (x)
P/E
Ca s h PE
EV/EBITDA
EV/Sa les
Pri ce-to-Book Value
Profitability Ratios (%)
EBITDA Ma rgin
RoE
RoCE (pre-tax)
RoIC (pre-tax)
Turnover Ratios
Debtors (Days )
Inventory (Da ys)
Credi tors (Days)
As s et Turnover (x)
Leverage Ratio
Debt/Equity (x)
Cash Flow Statement
Y/E March
EBITDA
(Inc.)/Dec. in WC
Di rect Ta xes Paid
Other Items
CF from Oper. Activity
(Inc.)/Dec. in FA and CWIP
Free Cash Flows to Firm
Interest a nd Dividend
(Pur.)/Sa le of Invest.
CF from Inv. Activity
Is sue of Shares
Inc./(Dec.) in Debt
Interest Pa id
Di vi dends Paid
CF from Finan. Activity
Inc./(Dec.) in Cash
Add: Opening Balance
Closing Balance
FY17
-6.4
-0.6
89.7
FY18
0.3
6.1
89.4
FY19
6.3
13.3
96.0
0.5
21.5
10.1
10.3
1.5
1.4
0.2
-7.1
-2.9
-5.3
24.1
129.1
42.9
0.6
1.1
9.1
0.3
3.4
4.1
24.5
108.0
52.5
0.7
1.2
14.6
6.8
8.6
10.7
24.5
106.3
46.1
0.8
1.1
FY20
-0.5
13.8
100.5
0.0
na
9.8
19.1
1.8
1.3
9.3
9.3
9.3
9.3
9.3
9.3
9.3
0.7
1.3
FY21
13.1
18.8
109.9
2.8
10.3
7.2
7.3
1.3
1.2
19.8
19.8
19.8
19.8
19.8
19.8
19.8
0.8
0.8
FY22E
38.5
49.5
138.0
10.0
3.5
2.7
3.0
0.9
1.0
19.5
19.5
19.5
19.5
19.5
19.5
19.5
1.0
0.5
FY23E
25.6
36.8
153.1
10.0
5.3
3.7
3.9
0.9
0.9
17.6
17.6
17.6
17.6
17.6
17.6
17.6
0.9
0.3
(INR b)
FY23E
193.3
10.6
-25.3
0.0
178.5
-70.0
108.5
8.7
0.0
-61.3
-40.0
-13.7
-41.3
-95.0
22.2
49.6
71.8
FY17
0.7
17.5
0.1
3.3
21.6
-54.3
-32.7
0.0
0.0
-54.3
58.3
-25.3
0.0
33.0
0.3
3.5
3.8
FY18
52.2
11.2
-1.4
-0.4
61.6
-66.0
-4.4
0.1
1.3
-64.7
31.2
-28.5
0.0
2.7
-0.3
3.8
3.5
FY19
97.6
-26.6
0.0
1.2
72.2
-38.8
33.3
1.3
0.3
-37.2
-2.4
-33.1
0.0
-35.5
-0.6
3.5
2.9
FY20
57.1
-106.6
-0.9
44.2
-6.2
-43.8
-50.0
1.5
0.1
-42.3
89.1
-36.5
-2.5
50.0
1.6
2.9
4.5
FY21
127.4
100.6
-0.3
6.5
234.3
-35.3
199.0
1.3
0.1
-33.9
-163.3
-29.4
-4.1
-196.9
3.5
4.5
8.0
FY22E
269.8
-18.4
-38.3
0.0
213.0
-60.0
153.0
7.8
0.0
-52.2
-60.0
-17.9
-41.3
-119.2
41.6
8.0
49.6
12 June 2021
8
 Motilal Oswal Financial Services
SAIL
Ex planation of Inv estment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We hav e forw ard looking estimates for the stock but w e refrain from assigning recommendation
*In case the recommendation giv en by the Research Analyst is inconsistent w ith the investment rating legend for a continuous period of 30 days, the Research Analy st shall w ithin
follow ing 30 day s take appropriate measures to make the recommendation consistent w ith the inv estment rating legend.
Disclosures
The follow ing Disclosures are being made in compliance w ith the SEBI Research Analy st Regulations 2014 (herein after referred to as the Regulations).
Motilal Osw al Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Inv estment Adv isory Serv ices, Depository participant serv ices & distribution of v arious financial
products. MOFSL is a subsidiary company of Passionate Inv estment Management Pv t. Ltd.. (PIMPL). MOFSL is a listed public company , the details in respect of w hich are
av ailable on www.motilaloswal.com. MOFSL (erstw hile Motilal Osw al Securities Limited - MOSL) is registered w ith the Securities & Ex change Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with C entral Depository Serv ices Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Dev elopment Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Osw al Financial Serv ices Limited are
av ailable on the w ebsite at
http://onlinereports.motilalosw al.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analy st and their relativ es may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction inv olv ing such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests w ith respect to any recommendation and other related information and opinions.; how ever the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the v iew s of the associates of MOFSL ev en
though there might ex ist an inherent conflict of interest in some of the stocks mentioned in the res earch report
MOFSL and / or its affiliates do and seek to do business including investment banking w ith companies cov ered in its research reports. As a result, the recipients of this report
should be aw are that MOFSL may have a potential conflict of interest that may affect the objectiv ity of this report. Compensation of Research Analy sts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Osw al Financial Services Limited are av ailable on the
w ebsite at
https://galax y .motilalosw al.com/ResearchAnaly st/PublishView Litigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may v ary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance w ith Research Team as all the activ ities are segregated
from MOFSL research activ ity and therefore it can hav e an independent v iew w ith regards to Subject Company for w hich Research Team hav e ex pressed their v iew s.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use w ould be contrary to law , regulation or w hich w ould subject MOFSL & its group companies to registration or licensing requirements w ithin such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Law s of Hong Kong) “SFO”. As per SEBI (Research Analy st
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement w ith Motilal Osw al capital Markets (Hong Kong) Priv ate Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Inv estors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activ ity
to w hich this document relates is only available to professional inv estor and w ill be engaged only w ith professional inv estors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or ex empt from registration. The Indian Analy st(s) w ho compile this report is/are not
located in Hong Kong & are not conducting Research Analy sis in Hong Kong.
For U.S.
Motilal Osw al Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Ex change Act of 1934, as amended (the"1934 act") and under
applicable state law s in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Adv isers
Act" and together w ith the 1934 Act, the "Acts), and under applicable state law s in the United States. Accordingly , in the absence of specific ex emption under the Acts, any
brokerage and inv estment services provided by MOFSL , including the products and serv ices described herein are not av ailable to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Inv estors" as defined by Rule 15a-6(b)(4) of the Ex change Act and interpretations thereof by SEC (henceforth referred to as
"major institutional inv estors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to w hich
this document relates is only available to major institutional investors and will be engaged in only with major institutional inv estors. In reliance on the ex emption from registration
prov ided by Rule 15a-6 of the U.S. Securities Ex change Act of 1934, as amended (the "Ex change Act") and interpretations thereof by the U.S. Securities and Ex change
Commission ("SEC") in order to conduct business with Institutional Inv estors based in the U.S., MOFSL has entered into a chaperoning agreement w ith a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report w ill hav e to be ex ecuted w ithin the prov isions of this
chaperoning agreement.
The Research Analy sts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analy st may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication w ith a subject company , public
appearances and trading securities held by a research analy st account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
serv ices license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Inv estors”,
of w hich some of w hom may consist of "accredited" institutional inv estors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly , if a Singapore person is not or ceases to be such an institutional inv estor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not hav e equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in t he past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
12 June 2021
9
 Motilal Oswal Financial Services
SAIL
********************************************************************************************************************************
The associates of MOFSL may hav e:
- financial interest in the subject company
- actual/beneficial ow nership of 1% or more securities in the subject company
- receiv ed compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests w ith respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoev er on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the v iews of the associates of MOFSL ev en
though there might ex ist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction inv olv ing such securities and earn brokerage or other compensation or act as a market mak er in the financial instruments of the
company (ies) discussed herein or act as an adv isor or lender/borrow er to such company (ies)
- receiv ed compensation from the subject company in the past 12 months for inv estment banking / merchant banking / brokerage serv ices or from other than said serv ices.
The associates of MOFSL has not receiv ed any compensation or other benefits from third party in connection w ith the research report
Abov e disclosures include beneficial holdings ly ing in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients w hich are not considered in abov e disclosures.
Analyst Certification
The v iews expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analy st(s) w as, is, or w ill be directly or indirectly related to the specific recommendations and v iew s ex pressed by research analy st(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in w hole, to any other person or to the media or reproduced in any form, without prior w ritten consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently v erified and no guaranty ,
representation of w arranty , express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously , not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by v irtue of their receiv ing this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any w ay , transmitted to, copied or
distributed, in part or in w hole, to any other person or to the media or reproduced in any form, w ithout prior w ritten consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes inv estment, legal, accounting and tax advice or a representation that any investment or s trategy is suitable or appropriate to y our specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all inv estors, who must make their own investment decisions, based on their ow n investment
objectiv es, financial positions and needs of specific recipient. This may not be taken in substitution for the ex ercise of independent judgment by any recipient. Each recipient of this
document should make such inv estigations as it deems necessary to arriv e at an independent ev aluation of an inv estment in the securities of companies referred to in this
document (including the merits and risks involv ed), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
ex pressed may not be suitable for all inv estors. Certain transactions -including those inv olv ing futures, options, another deriv ativ e products as w ell as non-inv estment grade
securities - inv olv e substantial risk and are not suitable for all inv estors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the v iews expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or hav e effected an ow n account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform inv estment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analy sis of MOFSL. The views expressed are those of the analy st, and the Company may or
may not subscribe to all the v iews expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity w ho is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, av ailability or use w ould be contrary to law ,
regulation or w hich would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselv es of and to observ e such restriction.
Neither the Firm, not its directors, employees, agents or representativ es shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
rev enue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to ex empt MOFSL or any of its
affiliates or employ ees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
ex penses that may be suffered by the person
accessing this information due to any errors and delay s.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Say ani Road, Opposite Parel ST Depot, Prabhadev i, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex , New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Osw al Financial Serv ices Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analy st:
INH000000412. AMFI: ARN - 146822; Inv estment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC w hich is group company of MOFSL. Motilal Osw al Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, whic h is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fix ed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Inv estment Advisors II Pv t.
Ltd. w hich is a group company of MOFSL. Priv ate Equity is offered through Motilal Osw al Priv ate Equity Inv estment Adv isors Pv t. Ltd w hich is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Inv estment in securities market is subject to market risk, read all the related documents carefully before inv esting. Details of Compliance
Officer: Name: Neeraj Agarw al, Email ID: na@motilalosw al.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
12 June 2021
10