Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Steel Authority Of India Ltd. indicates a balanced outlook for investors. It suggests that while the stock is not currently a strong buy, it is also not a sell candidate. Investors should consider holding their positions, as the company exhibits a mix of strengths and challenges across key evaluation parameters. This rating was assigned following a review on 23 December 2025, reflecting a notable improvement from the previous 'Sell' grade, with the Mojo Score rising from 48 to 65 points.
How the Stock Looks Today: Quality Assessment
As of 21 January 2026, Steel Authority Of India Ltd. holds an average quality grade. The company’s operational performance has shown signs of stagnation, with operating profit growth at an annualised rate of -0.19% over the past five years. This flat growth trend is a concern for long-term investors seeking consistent expansion. Additionally, the company’s ability to service its debt remains limited, with a Debt to EBITDA ratio of 2.69 times, indicating a relatively high leverage position that could constrain financial flexibility.
Valuation Perspective
The valuation grade for Steel Authority Of India Ltd. is currently attractive. The stock trades at a discount relative to its peers’ historical valuations, supported by a Return on Capital Employed (ROCE) of 5.5% and an enterprise value to capital employed ratio of 1. This valuation appeal is particularly relevant given the stock’s market capitalisation in the midcap segment, offering potential value for investors willing to look beyond short-term earnings volatility.
Financial Trend and Profitability
Financially, the company’s trend is flat, reflecting subdued profit growth and recent quarterly results that have disappointed. The latest quarterly data shows a 15.5% decline in profit before tax excluding other income, standing at ₹688.71 crores, and an 11.5% fall in profit after tax at ₹673.53 crores compared to the previous four-quarter average. The debt-equity ratio remains elevated at 3.49 times as of the half-year mark, underscoring the company’s leveraged position. Despite these challenges, the stock has delivered a robust 34.11% return over the past year, outperforming the BSE500 index across multiple time frames including one year, three months, and three years.
Technical Outlook
Technically, Steel Authority Of India Ltd. is rated bullish. The stock’s recent price movements reflect positive momentum, with a one-month gain of 17.12% and a three-month increase of 13.51%. The day’s trading on 21 January 2026 saw a 1.41% rise, signalling continued investor interest. This bullish technical grade supports the 'Hold' rating by suggesting that the stock may sustain its upward trajectory in the near term, although investors should remain cautious given the mixed fundamental backdrop.
Institutional Interest and Market Position
Institutional investors hold a significant stake of 21.86% in Steel Authority Of India Ltd., with their holdings increasing by 0.9% over the previous quarter. This level of institutional ownership often reflects confidence in the company’s prospects, as these investors typically have greater resources and expertise to analyse fundamentals. The company’s midcap status within the ferrous metals sector positions it as a notable player, benefiting from sectoral dynamics and market cycles.
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Investor Takeaway
For investors, the 'Hold' rating on Steel Authority Of India Ltd. suggests a cautious but optimistic stance. The company’s attractive valuation and bullish technical indicators provide reasons for confidence, while the average quality and flat financial trends counsel prudence. The stock’s strong recent returns and institutional backing add further support to maintaining current positions rather than initiating new ones or exiting holdings.
Sector and Market Context
Operating within the ferrous metals sector, Steel Authority Of India Ltd. faces cyclical industry challenges and opportunities. The sector’s performance is often linked to broader economic conditions, infrastructure spending, and commodity price fluctuations. The company’s midcap market capitalisation places it in a competitive position to benefit from sectoral upswings, though investors should monitor debt levels and profit trends closely.
Summary of Key Metrics as of 21 January 2026
To summarise, the stock’s key metrics as of today include a Mojo Score of 65.0, reflecting the 'Hold' grade. The stock has delivered a 34.11% return over the past year, with shorter-term gains of 17.12% over one month and 13.51% over three months. The company’s debt metrics remain elevated, with a Debt to EBITDA ratio of 2.69 times and a debt-equity ratio of 3.49 times. Profitability has been under pressure recently, with quarterly profits declining by over 11%. Institutional ownership stands at a healthy 21.86%, signalling confidence from sophisticated investors.
Overall, the current rating and analysis provide a comprehensive view for investors seeking to understand Steel Authority Of India Ltd.’s position in the market as of 21 January 2026.
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