SAIL: Profitability uptick holds key to upgrades

Current stock prices factor in higher operating profits compared to analyst estimates

The Steel Authority of India Ltd (SAIL) stock has not moved much since its results, despite the company being in the news for its joint venture (JV) with ArcelorMittal for an automobile-grade steel plant and a mega expansion plan. This is due to the worries on its profit. Operating profit, which got a boost during the first half of FY17, helped by higher realisations and lower input costs (primarily coal), slipped into the red during the second half.  

Volatility in coking coal prices was the primary reason, as the company is largely dependent on external coal supplies, mostly imported. Losses