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					                                                                                                     3QFY2012 Result Update | Steel
                                                                                                                       February 15, 2012



 Steel Authority of India                                                                    NEUTRAL
                                                                                             CMP                                     `112
 Performance Highlights                                                                      Target Price                               -
  




 Particulars (` cr)       3QFY12      3QFY11       % chg (yoy)    2QFY12      % chg (qoq)    Investment Period                            -
 Net sales                 10,594      11,143             (4.9)    10,811           (2.0)
 EBITDA                      1,581       1,763          (10.3)      1,327           19.1    Stock Info
 EBITDA margin (%)            14.9        15.8          (89)bp       12.2          268bp
                                                                                            Sector                                     Steel
 Adj. PAT                    1,098       1,074             2.2      1,003             9.5
                                                                                            Market Cap (` cr)                       46,219
 Source: Company, Angel Research
                                                                                            Beta                                        1.2
 For 3QFY2012, SAIL’s sales volumes were below our estimates, while its PAT was             52 Week High / Low                      177/73
 higher-than-our expectations due to lower-than-expected raw material costs. We             Avg. Daily Volume                      561,590
 maintain our Neutral rating on the stock.                                                  Face Value (`)                               10
 Lower volumes affect 3QFY2012 net sales: During 3QFY2012, SAIL’s net sales                 BSE Sensex                              18,202
 decreased by 4.9% yoy to `10,594cr (below our estimates of `12,239cr) mainly               Nifty                                    5,532
 due to lower sales volumes (-19.4% yoy to 2.6mn tonnes), partially offset by               Reuters Code                            SAIL.BO
 increase in realizations (+17.9% yoy to `40,435/tonne).                                    Bloomberg Code                      SAIL@IN

 Power and fuel costs dent SAIL’s EBITDA: Despite 17.9% yoy growth in realization,
 EBITDA dipped by 10.3% yoy to `1,581 mainly due to higher power and fuel (up               Shareholding Pattern (%)
 27.1% yoy). The company reported an exceptional item related to forex loss of              Promoters                                 85.8
 `466cr in 3QFY2012. Hence, reported PAT decreased by 42.9% yoy to `632cr.                  MF / Banks / Indian Fls                    7.9
 However, excluding exceptional items, adjusted PAT grew by 2.2% yoy to                     FII / NRIs / OCBs                          3.4
 `1,098cr (in-line with our estimate of `1,083cr) during 3QFY2012.                          Indian Public / Others                     2.9

 Expansion projects delay continues: SAIL has delayed the commissioning of
 integrated brownfield expansion in Bokaro of 1mn tonnes and Rourkela of 2mn
                                                                                            Abs. (%)             3m          1yr        3yr
 tonnes by two quarters to 1QFY2013 and 4QFY2013, respectively.
                                                                                            Sensex               7.8        (0.4)     88.9
 Outlook and valuation: SAIL is expected to increase its saleable steel production          SAIL                13.4       (30.9)     23.8
 capacity from 12.5mn tonnes to 23.1mn tonnes by FY2015. However, the
 company has reported delays and cost overruns in most of its expansion plans.
 The stock is currently trading at an EV/EBITDA of 10.2x FY2012 and 8.2x
 FY2013, a significant premium to its peers. Given the modest volume growth in
 the near term and fair valuations, we maintain our Neutral view on the stock.
 Key financials
     Y/E March (` cr)                  FY2010         FY2011       FY2012E       FY2013E
     Net sales                         40,551         42,720        44,023        50,721
     % chg                                (7.2)           5.3          3.0           15.2
     Net profit                          6,754          4,881        3,953         4,581
     % chg                                 9.4          (27.7)       (19.0)          15.9
     EPS (`)                              16.4           11.8          9.6           11.1
     EBITDA margin (%)                    24.5           17.7         13.9           16.8
     P/E (x)                               6.8            9.5         11.7           10.1
     P/BV (x)                              1.4            1.2          1.1            1.0
     RoE (%)                              21.9           13.7         10.0           10.6
     RoCE (%)                             19.2           10.7          7.1            8.4
                                                                                            Bhavesh Chauhan
     EV/Sales (x)                          1.0            1.2          1.4            1.4
                                                                                            Tel: 022- 39357800 Ext: 6821
     EV/EBITDA (x)                         4.1            6.6         10.2            8.2
                                                                                            bhaveshu.chauhan@angelbroking.com
 Source: Company, Angel Research

Please refer to important disclosures at the end of this report                                                                           1
                                                                SAIL | 3QFY2012 Result Update



                    Exhibit 1: 3QFY2012 performance
                    (` cr)                            3QFY12    3QFY11       yoy (%)    2QFY12    qoq (%)
                    Net sales                         10,594     11,143         (4.9)   10,837      (2.2)
                    Raw material                       4,736        5,299     (10.6)     5,156      (8.1)
                    % of net sales                      44.7         47.6                 47.6
                    Consumption of stores & spares       657         581        13.1       652       0.8
                    % of net sales                       6.2          5.2                  6.0
                    Power & fuel                       1,128         888        27.1     1,124       0.4
                    % of net sales                      10.7          8.0                 10.4
                    Staff cost                         1,865        1,863        0.1     1,981      (5.9)
                    % of net sales                      17.6         16.7                 18.3
                    Other expenditure                    762         886      (14.0)       740       2.9
                    % of net sales                       7.2          8.0                  6.8
                    Total expenditure                  9,148        9,517       (3.9)    9,652      (5.2)
                    Operating profit                   1,446        1,626     (11.1)     1,184      22.1
                    Operating margin (%)                13.7         14.6                 10.9
                    Other operating income               135         136        (1.1)      143      (5.6)
                    EBITDA                             1,581        1,763     (10.3)     1,327      19.1
                    EBITDA margin (%)                   14.9         15.8                 12.2
                    Net Interest income/(exp.)           185         201        (8.0)      234     (20.8)
                    Depreciation                         409         379         7.9       394       3.9
                    Other income                          13          11        22.6        57     (76.9)
                    Exceptional items                   (466)         33                  (509)
                    Profit before tax                    904        1,628     (44.5)       715      26.4
                    % of net sales                       8.5         14.6                  6.6
                    Current tax                          272         521      (47.8)       220      23.3
                    % Tax rate                          30.1         32.0                 30.8
                    Profit after tax                     632        1,107     (42.9)       495      27.8
                    Adjusted PAT                       1,098        1,074        2.2     1,003       9.5
                    Source: Company, Angel Research



                    Exhibit 2: 3QFY2012 – Actual vs. Angel estimates
                    (` cr)                                 Actual           Estimates       Variation (%)
                    Net sales                             10,594              12,239               (13.4)
                    EBITDA                                 1,581               1,713                (7.7)
                    EBITDA margin (%)                       14.9                14.0                92bp
                    Adjusted PAT                           1,098               1,083                 1.4
                    Source: Company, Angel Research




February 15, 2012                                                                                       2
                                                                                                                                             SAIL | 3QFY2012 Result Update



                                                                     Result highlights
                                                                     Lower sales volumes lead to decline in net sales

                                                                     During 3QFY2012, SAIL’s net sales decreased by 4.9% yoy to `10,594cr, below
                                                                     our estimates of `12,239cr mainly due to lower-than-expected sales volumes. Its
                                                                     sales volumes decreased by 19.4% yoy to 2.6mn tonnes, while its blended
                                                                     realization grew by 17.9% yoy to `40,435/tonne.

Exhibit 3: Sales volume stood at 2.6mn tonnes                                                       Exhibit 4: Top line grew by % yoy

              3.5                    3.3                                       42,000                   14,000                                                                         25
                            3.0                 3.1
                                                      2.8     2.9                                       12,000                                                 19.7                    20
              3.0                                                      2.6     40,000
                     2.4
              2.5                                                                                       10,000                                14.9                                     15
                                                                               38,000
(mn tonnes)




                                                                                                             8,000                                                                     10
              2.0                                                                       (`/tonne)


                                                                                                    (` cr)




                                                                                                                                                                                              (%)
                                                                               36,000                                                 6.6
              1.5                                                                                            6,000                                                                     5
                                                                               34,000                                                                                   2.2
              1.0                                                                                            4,000        0.9                        (0.1)                             0

                                                                               32,000                        2,000                                                            (4.9)    (5)
              0.5

              0.0                                                              30,000                            0                                                                     (10)
                    1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12                                                 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12
                           Sales volume (LHS)          Average realisation (RHS)                                                Net revenue (LHS)            yoy chg (RHS)

Source: Company, Angel Research                                                                     Source: Company, Angel Research


                                                                     Power and fuel costs dent SAIL’s EBITDA

                                                                     Raw-material cost and other expenditure decreased by 10.6% and 14.0% yoy to
                                                                     `4,736 and `762cr, respectively (below our estimates). However, power and fuel
                                                                     cost increased by 27.1% yoy to `1,128cr. EBITDA dipped by 10.3% yoy to
                                                                     `1,581cr and EBITDA margin contracted by 89bp yoy to 14.9% (higher than our
                                                                     estimate of 14.0%). EBITDA/tonne grew by 11.3% yoy and 29.6% qoq to `6,035 in
                                                                     3QFY2012.


                                                                     Exhibit 5: Quarterly performance
                                                                      (`/tonne of saleable steel)                       3QFY12              3QFY11    yoy (%)         2QFY12          qoq (%)
                                                                      Revenue                                            40,435             34,287       17.9         38,023                 6.3
                                                                      Cost                                               34,915             29,284       19.2         33,868                 3.1
                                                                      Raw-material cost                                  16,873             15,695           7.5      17,326               (2.6)
                                                                      Consumption of stores                                2,508             1,787       40.4          2,288                 9.6
                                                                      Power and fuel                                       4,307             2,731       57.7          3,943                 9.2
                                                                      Staff cost                                           7,117             5,734       24.1          6,950                 2.4
                                                                      Other expenditure                                    4,110             3,336       23.2          3,361               22.3
                                                                      EBITDA                                               6,035             5,423       11.3          4,657               29.6
                                                                      EBITDA (US$/tonne)                                        119            121       (1.2)           100               19.6
                                                                      Source: Company, Angel Research




February 15, 2012                                                                                                                                                                              3
                                                                                                                            SAIL | 3QFY2012 Result Update



                                                              Forex loss hits bottom-line

                                                              The company reported an exceptional item related to forex loss of `466cr in
                                                              3QFY2012, compared to exceptional gain of `33cr in 3QFY2011. Hence, PAT
                                                              decreased by 42.9% yoy to `632cr. However, excluding exceptional items,
                                                              adjusted PAT grew by 2.2% yoy to `1,098cr (in-line with our estimate of `1,083cr)
                                                              during 3QFY2012.

Exhibit 6: EBITDA margin stood at 14.9%                                                Exhibit 7: Adj. PAT stood at `1,098 cr

         2,500                                                            25.0              1,600                               1,507                            20
                                         2,211
                                                                                            1,400                                                                10
         2,000   1,843                                                    20.0                         1,177
                                 1,763                                                                                                                   1,098
                                                                                            1,200                      1,074
                         1,542                                    1,581                                                                          1,003           0
                                                                                                               937
         1,500                                    1,312   1,327           15.0              1,000                                        839                     (10)
(` cr)




                                                                                        (` cr)
                                                                                                 800
                                                                                 (%)




                                                                                                                                                                        (%)
         1,000                                                            10.0                                                                                   (20)
                                                                                                 600
                                                                                                                                                                 (30)
                                                                                                 400
          500                                                             5.0
                                                                                                 200                                                             (40)

             0                                                            0.0                      0                                                             (50)
                 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12                                      1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12
                         EBITDA (LHS)            EBITDA margin (RHS)                                           Adj. PAT (LHS)           Adj. PAT margin (RHS)

Source: Company, Angel Research                                                        Source: Company, Angel Research




February 15, 2012                                                                                                                                                        4
                                                                       SAIL | 3QFY2012 Result Update



                    Investment rationale
                    Volume growth to double, albeit in 3 years

                    SAIL is expected to increase its saleable steel production capacity from 12.5mn
                    tonnes to 23.1mn tonnes by FY2015 at a capex of `70,000cr. We expect strong
                    profitability from these plants, with captive iron ore backing the upcoming steel
                    expansion. Also, we expect SAIL's older loss-making plants to be modernized as
                    part of its modernization program. However, the company has reported delays in
                    its expansion projects over the last few quarters. Going forward, we do not rule out
                    delays and cost over-runs in its expansion plans.

                    Exhibit 8: Capacity to double by FY2015

                                   30



                                   20     11.7
                                                                   11.1
                      (mn tonne)




                                                                                        10.5


                                   10
                                          14.5                     13.5                 12.6

                                    0
                                        Hot Metal                Crude steel        Saleable Steel

                                                      Existing          Expansion


                    Source: Company, Angel Research



                    Product mix to improve

                    Post the expansion and modernization of the steel plants, SAIL will benefit from the
                    improvement in its product mix. Management plans to reduce sale of semis to nil
                    post the expansion of its steel capacity. Semis constituted 19.7% of the company’s
                    product mix in FY2010 (11.0% of the product mix in FY2011). Contribution from
                    high-margin structural steel is also expected to improve.

                    Cost pressures to persist

                    SAIL’s 3QFY2012 profitability was hit on account of higher power and fuel costs.
                    Going forward, we expect these cost pressures to keep its margin growth muted.
                    Further, we do not expect meaningful rise in steel prices in the near term.
                    Nevertheless, declining coking coal prices should benefit its margins slightly.




February 15, 2012                                                                                     5
                                                                                                                                   SAIL | 3QFY2012 Result Update



                                   Outlook and valuation

                                   SAIL is expected to increase its saleable steel production capacity from 12.5mn
                                   tonnes to 23.1mn tonnes by FY2015. With captive iron ore backing the upcoming
                                   steel expansion, we expect robust profitability from these plants. Also, we expect
                                   SAIL's older loss-making plants to be modernized as part of its modernization
                                   program. However, the company has reported delays and cost overruns in most of
                                   its expansion plans. The stock is currently trading at an EV/EBITDA of 10.2x
                                   FY2012 and 8.2x FY2013, a significant premium to its peers. Given the modest
                                   volume growth in the near term and fair valuations, we maintain our Neutral view
                                   on the stock.

                                   We have lowered our FY2013 sales volumes estimates considering further delays
                                   in SAIL’s expansion plans. Hence, our FY2013 profitability estimates stand
                                   reduced.


Exhibit 9: Change in estimates
 (` cr)                                        Earlier estimates                               Revised estimates                                  Upgrade/(Downgrade) (%)
                                              FY12              FY13                            FY12                        FY13                           FY12                  FY13
 Net sales                                  46,170            54,932                        44,023                    50,721                                (4.7)                 (7.7)
 EBITDA                                      6,261             9,414                          6,124                       8,527                             (2.2)                 (9.4)
 EBITDA margin (%)                            13.6                17.1                               13.9                     16.8                         35bp                 (33)bp
 PBT                                         5,686             7,577                          5,271                       6,837                             (7.3)                 (9.8)
 Net income                                  3,809             5,077                          3,953                       4,581                              3.8                  (9.8)
 Net margin (%)                                 8.3                     9.2                           9.0                          9.0                     73bp                 (21)bp
 Source: Company, Angel Research



                                   Exhibit 10: EPS – Angel forecast vs. Consensus
                                   Year (%)                                            Angel forecast                      Bloomberg consensus                         Variation (%)
                                   FY2012E                                                                  9.6                                             9.5                          0.7
                                   FY2013E                                                              11.1                                               10.7                          3.7
                                   Source: Bloomberg, Angel Research



                                   Exhibit 11: EV/EBITDA

                                           180,000
                                           160,000
                                           140,000
                                           120,000
                                           100,000
                                   (`cr)




                                           80,000
                                           60,000
                                           40,000
                                           20,000
                                                0
                                                               Dec-05




                                                                                                            Dec-07




                                                                                                                                                  Dec-09




                                                                                                                                                                                Dec-11
                                                     Apr-05




                                                                                            Apr-07




                                                                                                                                         Apr-09




                                                                                                                                                                       Apr-11
                                                                              Aug-06




                                                                                                                          Aug-08




                                                                                                                                                              Aug-10




                                                                                       2x             5x             8x              11x           14x

                                   Source: Bloomberg, Angel Research




February 15, 2012                                                                                                                                                                          6
                                                                                                                                                                   SAIL | 3QFY2012 Result Update



                                                      Exhibit 12: P/E band

                                                               400

                                                               350

                                                               300

                                                               250

                                                               200




                                                      (`)
                                                               150

                                                               100

                                                               50

                                                                0




                                                                                                                                            Dec-07
                                                                                        Aug-05




                                                                                                                                                          Jul-08




                                                                                                                                                                                                              Apr-10
                                                                                                     Mar-06


                                                                                                               Oct-06




                                                                                                                                                                          Feb-09


                                                                                                                                                                                            Sep-09




                                                                                                                                                                                                                                Nov-10
                                                                                                                             May-07




                                                                                                                                                                                                                                               Jun-11
                                                                     Jan-05




                                                                                                                                                                                                                                                           Jan-12
                                                                                                                             5x                10x                      15x                  20x

                                                      Source: Bloomberg, Angel Research



                                                      Exhibit 13: P/BV band

                                                               180,000
                                                               160,000
                                                               140,000
                                                               120,000
                                                               100,000
                                                       (`cr)




                                                                80,000
                                                                60,000
                                                                40,000
                                                                20,000
                                                                          0
                                                                                                  Dec-05




                                                                                                                                              Dec-07




                                                                                                                                                                                                     Dec-09




                                                                                                                                                                                                                                                         Dec-11
                                                                               Apr-05




                                                                                                                             Apr-07




                                                                                                                                                                                   Apr-09




                                                                                                                                                                                                                                           Apr-11
                                                                                                              Aug-06




                                                                                                                                                               Aug-08




                                                                                                                                                                                                                       Aug-10
                                                                                                                        2x             5x                8x                   11x                     14x

                                                      Source: Bloomberg, Angel Research



Exhibit 14: Recommendation summary
Company      CMP    Target Price   Reco.    Mcap      Upside                       P/E (x)                             P/BV (x)                        EV/EBITDA (x)                                 RoE (%)                               RoCE (%)
              (`)            (`)             (` cr)            (%)       FY12E                   FY13E        FY12E           FY13E                  FY12E          FY13E                   FY12E               FY13E                    FY12E          FY13E
SAIL         112               - Neutral   46,219                -            11.7                10.1             1.1                1.0               9.3               7.2                10.0                  10.6                    7.1             8.4
Tata Steel   495           558 Accum.      48,089              13             12.1                  8.7            1.0                0.9               7.6               5.4                18.8                  10.9                    7.0             9.4
JSW Steel    870               - Neutral   19,405                -            19.5                12.0             1.2                1.1               6.5               5.5                   6.7                10.1                    9.0           10.8

Source: Company, Angel Research




February 15, 2012                                                                                                                                                                                                                                                   7
                                                                  SAIL | 3QFY2012 Result Update



                    Profit & loss statement
                    Y/E March (` cr)           FY2008   FY2009    FY2010    FY2011    FY2012E    FY2013E
                    Gross sales                46,046   49,250    43,935    47,042     48,914     56,356
                    Less: Excise duty           6,047    5,531     3,383     4,321      4,891      5,636
                    Net sales                  39,999   43,719    40,551    42,720     44,023     50,721
                    Other operating income          -         -     756       663        535        550
                    Total operating income     39,999   43,719    41,307    43,383     44,558     51,271
                    % chg                        16.5      9.3      (5.5)      5.0        2.7       15.1
                    Total expenditure          28,875   35,185    31,362    35,839     38,434     42,744
                    Net raw materials          13,624   18,149    17,198    18,909     20,039     21,766
                    Other mfg costs             6,119    6,656     5,938     5,983      6,471      7,456
                    Personnel                   7,919    8,402     5,417     7,627      8,314      9,311
                    Other                       1,212    1,978     2,809     3,319      3,610      4,210
                    EBITDA                     11,124    8,534     9,945     7,544      6,124      8,527
                    % chg                        17.9    (23.3)     16.5     (24.1)     (18.8)      39.2
                    (% of net sales)             27.8     19.5      24.5      17.7       13.9       16.8
                    Depreciation                1,235    1,285     1,337     1,484      1,541      2,282
                    EBIT                        9,889    7,249     8,608     6,060      4,583      6,244
                    % chg                        20.3    (26.7)     18.8     (29.6)     (24.4)      36.3
                    (% of net sales)             24.7     16.6      21.2      14.2       10.4       12.3
                    Interest charges             251      253       402       472        792       1,014
                    Other income                1,831    2,408     1,926     1,440      1,480      1,607
                    (% of PBT)                   16.0     25.6      19.0      20.5       28.1       23.5
                    Share in profit of asso.        -         -         -         -          -         -
                    Recurring PBT              11,469    9,403    10,132     7,027      5,271      6,837
                    % chg                        21.7    (18.0)      7.7     (30.6)     (25.0)      29.7
                    Extra. Inc/(Expense)            -         -         -     130            -         -
                    PBT (reported)             11,469    9,403    10,132     7,157      5,271      6,837
                    Tax                         3,932    3,229     3,378     2,276      1,318      2,256
                    (% of PBT)                   34.3     34.3      33.3      31.8       25.0       33.0
                    PAT (reported)              7,537    6,175     6,754     4,881      3,953      4,581
                    Add: Earnings of asso.          -         -         -         -          -         -
                    Less: Minority interest         -         -         -         -          -         -
                    Extra. Expense/(Inc.)           -         -         -         -          -         -
                    Net income (reported)       7,537    6,175     6,754     4,881      3,953      4,581
                    Adj. net income             7,537    6,175     6,754     4,881      3,953      4,581
                    % chg                        21.5    (18.1)      9.4     (27.7)     (19.0)      15.9
                    (% of net sales)             18.8     14.1      16.7      11.4        9.0        9.0
                    Basic EPS (`)                18.2     14.9      16.4      11.8        9.6       11.1
                    Fully diluted EPS (`)        18.2     14.9      16.4      11.8        9.6       11.1
                    % chg                        21.5    (18.1)      9.4     (27.7)     (19.0)      15.9




February 15, 2012                                                                                      8
                                                                 SAIL | 3QFY2012 Result Update



                    Balance sheet (Consolidated)
                    Y/E March (` cr)           FY2008   FY2009   FY2010   FY2011   FY2012E   FY2013E
                    SOURCES OF FUNDS
                    Equity share capital        4,130    4,130    4,130    4,130     4,130     4,130
                    Reserves & surplus         18,933   23,854   29,186   33,474    36,944    41,042
                    Shareholders’ funds        23,064   27,984   33,317   37,604    41,074    45,173
                    Share application money         -        -        -      12        12        12
                    Share warrants                  -        -        -        -         -         -
                    Minority interest               -        -        -       1         1         1
                    Total loans                 3,045    7,539   16,511   21,260    26,260    33,260
                    Deferred tax liability      1,569    1,332    1,415    1,557     1,557     1,557
                    Total liabilities          27,677   36,855   51,243   60,434    68,905    80,003
                    APPLICATION OF FUNDS
                    Gross block                30,923   32,729   35,396   40,466    62,266    77,766
                    Less: Acc. depreciation    19,351   20,460   21,781   23,833    25,373    27,656
                    Net Block                  11,571   12,269   13,615   16,633    36,892    50,110
                    Capital work-in-progress    2,390    6,544   15,026   22,581    20,081    18,581
                    Goodwill                        -        -        -        -         -         -
                    Investments                  538      653      669       61        61        61
                    Current assets             26,318   34,511   39,081   38,833    31,324    31,261
                    Cash                       13,759   18,229   22,439   17,748    10,174     9,072
                    Loans & advances            2,380    2,122    3,343    4,904     4,904     4,904
                    Other                      10,178   14,160   13,299   16,181    16,245    17,285
                    Current liabilities        13,199   17,122   17,149   17,676    19,454    20,012
                    Net current assets         13,119   17,389   21,933   21,159    11,870    11,251
                    Mis. exp. not w/off           59         -        -        -         -         -
                    Total assets               27,677   36,855   51,243   60,434    68,905    80,003




February 15, 2012                                                                                  9
                                                                         SAIL | 3QFY2012 Result Update



                    Cash flow statement
                    Y/E March (` cr)                   FY2008 FY2009     FY2010    FY2011 FY2012E FY2013E
                    Profit before tax                  11,469    9,403   10,132     7,390     5,271     6,837
                    Depreciation                        1,234    1,287    1,334     1,607     1,541     2,282
                    Change in working capital           (743) (2,418)     1,492    (3,265)    1,715     (483)
                    Less: Other income                    201     990    (4,499)    (930)          -         -
                    Direct taxes paid                   3,783    3,139    3,659     2,303     1,318     2,256
                    Cash flow from operations           8,378    6,124    4,800     2,496     7,209     6,381
                    (Inc.)/ Dec. in net fixed assets   (2,199) (5,403) (10,125) (10,851) (19,300) (14,000)
                    (Inc.)/ Dec. in investments           (20)   (105)      (10)       (8)         -         -
                    (Inc.)/ Dec. in loans and adv.           -       -         -         -         -         -
                    Other income                       (1,079) (1,101)   (2,114)   (1,697)         -         -
                    Cash flow from investing           (1,140) (4,406)   (8,021)   (9,162) (19,300) (14,000)
                    Issue of equity                         1       1         5        20          -         -
                    Inc./(Dec.) in loans               (1,112)   4,520    8,887     3,609     5,000     7,000
                    Dividend paid                       1,643    1,496    1,400     1,400       483       483
                    Others                                334     273      96.5       536          -         -
                    Cash flow from financing           (3,089)   2,751    7,395     1,693     4,517     6,517
                    Inc./(Dec.) in cash                 4,150    4,469    4,174    (4,973)   (7,574)   (1,102)
                    Opening cash bal.                   9,610 13,759     18,265    22,721    17,748    10,174
                    Closing cash bal.                  13,759 18,229     22,439    17,748    10,174     9,072




February 15, 2012                                                                                          10
                                                                     SAIL | 3QFY2012 Result Update



                    Key ratios
                    Y/E March                      FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E
                    Valuation ratio (x)
                    P/E (on FDEPS)                    6.1     7.5       6.8     9.5   11.7    10.1
                    P/CEPS                            5.3     6.2       5.7     7.3    8.4     6.7
                    P/BV                              2.0     1.7       1.4     1.2    1.1     1.0
                    Dividend yield (%)                3.3        -      2.9     2.3    0.9     0.9
                    EV/Sales                          0.9     0.8       1.0     1.2    1.4     1.4
                    EV/EBITDA                         3.2     4.1       4.1     6.6   10.2     8.2
                    EV/Total assets                   1.3     0.9       0.8     0.8    0.9     0.9
                    Per share data (`)
                    EPS (Basic)                      18.2    14.9      16.4    11.8    9.6    11.1
                    EPS (fully diluted)              18.2    14.9      16.4    11.8    9.6    11.1
                    Cash EPS                         21.2    18.1      19.6    15.4   13.3    16.6
                    DPS                               3.7        -      3.3     2.6    1.0     1.0
                    Book value                       55.8    67.8      81.7    91.0   99.4   109.4
                    DuPont analysis
                    EBIT margin                      24.7    16.6      21.2    14.2   10.4    12.3
                    Tax retention ratio (%)          65.7    65.7      66.7    68.2   75.0    67.0
                    Asset turnover (x)                2.9     1.2       1.7     1.2    0.9     0.8
                    RoIC (Post-tax)                  47.8    13.2      24.3    11.6    6.9     6.5
                    Cost of debt (post tax)              -       -         -    1.5    2.3     2.0
                    Leverage (x)                         -       -         -    0.1    0.4     0.5
                    Operating RoE                    47.8    13.2      24.3    12.5    8.7     8.9
                    Returns (%)
                    RoCE (Pre-tax)                   39.1    14.0      19.2    10.7    7.1     8.4
                    Angel RoIC (pre-tax)             83.8    31.5      65.8    34.9   15.6    13.7
                    RoE                              37.3    18.3      21.9    13.7   10.0    10.6
                    Turnover ratios (x)
                    Asset turnover (gross block)      1.3     1.4       1.2     1.1    0.9     0.7
                    Inventory (days)                  184    204       194     222    210     200
                    Receivables (days)                 28      25        33     36     35      35
                    Payables (days)                    80      84      132     118    118     118
                    WC cycle (days)                    61      66        70     69     78      69
                    Solvency ratios (x)
                    Net debt to equity               (0.5)   (0.4)     (0.2)    0.1    0.4     0.5
                    Net debt to EBITDA               (1.0)   (1.3)     (0.5)    0.5    2.6     2.8
                    Interest coverage                39.4    28.6      21.4    12.8    5.8     6.2




February 15, 2012                                                                              11
                                                                                                     SAIL | 3QFY2012 Result Update




  Research Team Tel: 022 - 39357800                   E-mail: research@angelbroking.com                    Website: www.angelbroking.com

  DISCLAIMER

  This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
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  investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
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  Disclosure of Interest Statement                                                   SAIL

  1. Analyst ownership of the stock                                                   No
  2. Angel and its Group companies ownership of the stock                             No
  3. Angel and its Group companies' Directors ownership of the stock                  No
  4. Broking relationship with company covered                                        No

  Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors


  Ratings (Returns):              Buy (> 15%)                            Accumulate (5% to 15%)                     Neutral (-5 to 5%)
                                  Reduce (-5% to 15%)                    Sell (< -15%)


February 15, 2012                                                                                                                          12