Metals Q1 Results Preview - Stable Performance Of Steel Players Despite The Odds: ICICI Securities

ICICI Securities Report

We expect mixed Q1 FY25 performance of the companies under coverage. Key points:

1. Ebitda/tonne of ferrous companies may see only a slight decline;

2. non-ferrous players could benefit from higher London Metal Exchange prices; and

3. mining companies may gain from higher prices.

Going ahead, we expect spreads to bottom out for ferrous companies as full impact of lower coking coal prices is likely to flow from Q2 FY25. That said, we will keep a close track of prices. In case of non-ferrous as well, we expect relatively higher LME prices and stable coal prices to aid performance.

Our key picks in the sector are Jindal Stainless (Buy; Rs 955), Jindal Steel and Power (Buy; target price: Rs 1,240) and JSW Steel (Buy; Rs 1,140). Among smaller players, we prefer Shyam Metalics (Buy; target price: Rs 825).

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