>ANNUAL REPORT ANALYSIS ON SAIL (INDIA INFOLINE)

Steel Authority of India (SAIL)'s annual report for FY09 exhibhits the resilience shown by the company in one of the toughest global economic crisis. With soaring input prices, fluctuating market and the world economy in doldrums, SAIL remained undeterred, increasing its cash levels by Rs46bn even after incurring a capex of Rs64bn during the year. The company managed to save Rs8.3bn on account of the ehancement in operational efficiency by improving techno-economic parameters. The company has been constantly trying to increase the share of value added products (VAP)in overall sales. The company in FY09, achieved its best ever coke rate, specific energy consumption and labour productivity. SAIL's operating margin was negatively impacted by a surge in raw material costs (RM cost/ton of steel increased 46% yoy). Slippage in its mega expansion plan continued. The plants are now expected to be operational from FY12 onwards from earlier estimate of FY11.

• Large capex plans to turn SAIL into net-debt by FY11E
• Upgrade recommendation to Market Performer

To see full report: SAIL