NTPC, SAIL shares face a tough time on BSE

NTPC fell by 1% at Rs 147, falling 8% thus far in November, while SAIL traded at 1.5% lower at Rs 61.35 New Delhi: On Wednesday, shares of two state-owned companies, National Thermal Power Corporation (NTPC) and Steel Authority of India Limited (SAIL), hit their lowest in the past 52 weeks on the BSE
NTPC, SAIL shares face a tough time on BSE

NTPC down by 1%

NTPC fell by 1 percent to settle at Rs 147, registering an eight-percent decline thus far in November after India's largest power generator reported a decline in the second quarter of the current fiscal. It posted a net profit of Rs 24.26 billion as opposed to Rs 24.39 billion in the year-ago quarter. Turnover rose 12.65 percent to Rs 225 billion on the back of a rise in electricity generation, while total expenses rose 17.5 percent to Rs 199 billion during the quarter. The non-availability of coal for the power and non-power sector has been one of the major problems plaguing the two sectors and has been responsible for affecting NTPC's performance. Shortage of domestic coal has resulted in fixed charge under-recoveries and an increase in working capital driving higher interest cost.

SAIL trades 1.5% lower

On the other hand, SAIL traded 1.5 percent lower at Rs 61.35, extending its 3 percent decline on November 20 on the BSE. Since November, the shares of the steel major have fallen by 12 percent on the BSE after it reported lower than expected profit in the second quarter of the current fiscal. In comparison, the S&P BSE Sensex was up 0.31 percent during the period. SAIL failed to meet estimates of Rs 8.29 billion when it posted a net profit of Rs 5.54 billion for Q2FY19. It posted a loss of Rs 5.39 billion last year. Operational revenue grew 23 percent at Rs 167 billion from Rs 136 billion in the corresponding quarter of the previous year. JM Financial Institutional Securities said in result update, "We believe that value ascribed to CWIP (Capital Work in Progress account) should be in tandem with the operational performance delivered by the current capacities.

In the meantime, owing to its structural weakness, the company (SAIL) continues to lose domestic market share, while also realizing lesser for its products. Despite better raw material integration than some of its private peers, SAIL continues to deliver significantly lower EBITDA/ton."

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