At least two foreign brokerages BofA Securities and Jefferies have JSW Steel Ltd as their top pick from the metals & mining sector.
Going ahead, said BofA Securities, Q2 India Ebitda per ton for domestic steel producers may decline sequentially, led by lower realisations, mainly from seasonally weaker long steel prices, and higher coking coal costs. Volume growth should stay healthy at 4-11 per cent YoY, which should partly offset the margin pressure, it said.
"India Ebitda per ton for JSW Steel and Tata Steel is likely to contract by Rs 1,500-1,800 per ton. We expect a sharper decline at SAIL, given its higher long steel exposure," BofA Securities said as it picked JSW Steel as it top pick, given it is well positioned to benefit from India's robust long-term steel consumption growth," BofA Securities said.
Among other stocks, Hindustan Zinc Ltd (HZL) advanced 2.31 per cent to Rs 555.55. Nalco added 0.6 er cent to Rs 317.05. Hindalco and NMDC traded flat.
"We expect Sep-Q Ebitda to rise 5-9 per cent QoQ for Tata Steel, Jindal Stainless and JSW Steel, with volume growth more than offsetting margin contraction. We also expect Hindustan Zinc's Ebitda to grow 7 per cent QoQ on higher zinc prices but see Hindalco's consolidated Ebitda falling 17 per cent QoQ primarily on weaker aluminum prices," Jefferies said.
Jefferies likes Welspun Corp, which it said is well-positioned to benefit from a multi-year upcycle in oil & gas infrastructure spending in US and Middle East, supported by local manufacturing in both regions.
"We also remain constructive on JSW Steel, with India HRC spot prices currently 9% above the Sep-Q average and further upside possible if Asian steel spreads mean revert, supporting a stronger earnings outlook," it said.
Meanwhile, per the draft steel policy, consumption of finished steel is expected to jump to 505 million tons by 2047 from 164 million tons in FY26, crude steel-making capacity is seen expanding to 604 millio tons per year from 220 million tons. The annual consumption for iron is pegged at 772 million tons.
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