ICICIdirect has upgraded 'Hold' on Steel Authority of India (SAIL), with target price of Rs 78 in its report.
Commenting on the investment rationale, the stock broker said, ''The steel sector is facing headwinds in the form of a muted demand scenario both domestically as well as globally. Indian domestic steel demand has been stagnant with mere 0.6% consumption growth in FY14. In the current challenging times, SAIL has been able to report sales volume growth of 9.0% in FY14 indicating an increase in its domestic market share.
We have valued the stock at 6x FY16E EV/EBITDA and given a 15% discount to the company's CWIP to arrive at a target price of Rs 78. On the back of a healthy operational performance, we have upgraded the stock to Hold.''
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