Steel Authority of India (SAIL) is trading lower by 3% at Rs 48.45 in otherwise strong market on reports that a government panel recommended an increase in royalty fees for iron ore, a key raw material, which may lead erosion in earnings.
The stock opened at Rs 51 and hit a low of Rs 48.25, its lowest level since November, 2005 on the National Stock Exchange (NSE). A combined 4.27 million shares have changed hands on the counter till 1434 hours on NSE and BSE.
“SAIL, which currently pays 10% of sales to provincial government, will pay 50% more royalties to provinces where iron ore mines are located if government panel recommendation is implemented,” the Mint newspaper report suggests.
Meanwhile, the stock has underperformed the market by falling 18% since May 30, after reported 50% year-on-year (yoy) fall in net profit for the quarter ended March 2013 due to lower realizations and higher costs. Its volumes also declined 3.0% yoy to 3.2 million tonne during the quarter. The benchmark CNX Nifty fell 7% during the same period.
The stock opened at Rs 51 and hit a low of Rs 48.25, its lowest level since November, 2005 on the National Stock Exchange (NSE). A combined 4.27 million shares have changed hands on the counter till 1434 hours on NSE and BSE.
“SAIL, which currently pays 10% of sales to provincial government, will pay 50% more royalties to provinces where iron ore mines are located if government panel recommendation is implemented,” the Mint newspaper report suggests.
Meanwhile, the stock has underperformed the market by falling 18% since May 30, after reported 50% year-on-year (yoy) fall in net profit for the quarter ended March 2013 due to lower realizations and higher costs. Its volumes also declined 3.0% yoy to 3.2 million tonne during the quarter. The benchmark CNX Nifty fell 7% during the same period.
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