On the back of an impressive capacity expansion plan and robust earnings growth expectations, public sector steel major Steel Authority of India Ltd is poised to outpace its metal sector rivals, including private players giants like Tata Steel and Hindustan Zinc on the stock market radar going forward, the analysts believe.
According to a latest equity research report from Australian investment banking major Macquarie Bank, Indian steel are among the most attractively valued scrips with Steel Authority of India Ltd enjoying the best of the pack status.
The bank said SAIL is ranked fifth among the 145 Indian stocks under its coverage and is the top steel stock in the country.
The investment bank said its Macquarie Alpha model, which combines a range of valuation, analyst sentiments and price movement factors, continues to be overweight on the basic industries and in particular on the steel stocks.
Macquarie Research said SAIL, the country's largest integrated steel company, leads the league of all key steel stocks covered in its model with an Alpha value of 11.9 per cent, as against 6 per cent for Tata Steel and 7.6 per cent for Jindal Steel and Power.
Hindustan Zinc, the third biggest domestic metal company in terms of market capitalisation after SAIL and Tata Steel, has been given an Alpha value of 7 per cent.
According to the data available with Thomson Financial, which tracks worldwide analyst ratings for stocks, the PSU steel major enjoys an average analyst recommendation between 'buy' and 'strong buy'.
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