The shares of government company Steel Authority of India Limited i.e. SAIL have been downgraded by brokerage firm Nuvama. The price target has also been reduced. The stock declined on December 18.
The stock fell 2.7% to a low of ₹126.75 on the BSE during the day. Later settled at ₹127.15. The market cap of the company is more than ₹52500 crore.
Nuvama has cut the rating for SAIL stock to “Reduce” from “Hold”. The price target has been reduced by 25% to ₹106 per share from ₹141. The new target is 16.6% less than the closing price of the share.
Nuvama has cut SAIL’s EBITDA estimates by 17% for FY2026, 13% for FY2027 and 13% for FY2028, keeping in mind lower steel prices.
The brokerage estimates that SAIL’s EBITDA in the December 2025 quarter will be 30% lower than the previous quarter. At the current price, SAIL shares are trading at 6.9 times the estimated enterprise value to EBITDA for FY2027 and 2028. Nuvama considers this valuation expensive.
Nuwama also cited expectations of SAIL’s poor return ratio as the reason for the downgrade. The brokerage believes that the company’s return on equity will be 3.2% this financial year, 6.4% in FY 2027 and 6.5% in FY 2028.
Of the 30 analysts covering SAIL, 14 have a “Sell” rating for the stock. 12 have “Hold” rating and 4 have “Buy” rating. The government holds 65% stake in SAIL.