Metals Q2 Results Preview - A Challenging Quarter For Ferrous: ICICI Securities

ICICI Securities Report

Q2 FY25 was a lacklustre quarter for ferrous companies, mainly due to prices coming off owing to import pressure. Key points:

1. Realisation for ferrous companies was down Rs 2,800–3,200/tonne QoQ with longs prices falling more than flats.

2. Lower iron ore and coking coal prices did ameliorate the impact of realisation dip.

3. Non-ferrous companies are likely to fare better as price movement was mixed and volumes stable.

4. Mining companies likely to report earnings decline QoQ.

Going ahead, we expect spreads for ferrous to improve, as benefits of lower coking coal prices flow progressively into the P&L and steel prices seem to have stabilised.

We remain positive on ferrous with Jindal Stainless (target price: Rs 955), Jindal Steel & Power (target price: Rs 1,240) and JSW Steel (target price: Rs 1,140) – all Buys – as our key picks.

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