Poor execution, higher debt may take wind out of SAIL’s plans
- The company’s management is evaluating various expansion plans including modernization and removing of bottlenecks in the business
MUMBAI : At a time when investing in capacity expansion is seen as a strategy for long-term revenue growth, Steel Authority of India Ltd’s (SAIL) expansion plans appear to have made investors anxious. The worry is that the steelmaker’s expansion plans would lead to significantly higher capital expenditure (capex) thus keeping debt high in the coming years. This could explain why SAIL’s shares have underperformed so far in 2023, gaining 10% compared to 14% rise in the Nifty 500 index.