Metals, Mining Q3 Results Preview - Base Metals Margins To Expand: Axis Securities

Axis Securities Report

We expect steel companies under our coverage to report slight margin contraction QoQ. We expect Tata Steel Ltd. consolidated Ebitda to slightly de-grow QoQ, led by the drag in the European operations. Steel Authority of India Ltd. margins are expected to slightly contract QoQ on account of higher coking coal consumption costs.

We expect a much better quarter for base metal stocks under our coverage. Both Hindalco Industries Ltd. and National Aluminium Company Ltd. are expected to report margin expansion QoQ on lower power costs. Coal India is expected to report Ebitda growth QoQ on account of higher sales volumes. For structural steel tube companies, we expect a mixed quarter.

The Ebitda of APL Apollo tubes Ltd. is likely to de-grow on account of lower sales volume due to destocking, while the Ebitda of JTL Industries Ltd. is expected to grow due to higher sales volumes QoQ.

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