Stocks To Buy: Tata Steel, Hindalco, Nalco Among Metals And Mining Shares To Bet Recommended By Systematix

Systematix Research Report

The metals and mining sector posted mixed-bag earnings during the quarter, largely in line with expectations. The slow seasonal quarter was marked by lower exports impacted by a sluggish global demand environment. Strong volume deliveries, however, corroborate a positive domestic consumption story.

Lower steel prices dragged Ebitda/tonne for the steel producers while lower volumes did the same for mining companies this quarter. Backward integration, higher prices, product mix, and better volumes enabled margin expansion for the non-ferrous companies this quarter.

Tata Steel Ltd.

Key highlights

• India operations reported Ebitda of Rs 69.1 billion (-1%/-2% YoY/QoQ).

• Tata Steel Netherlands reported Ebitda of Rs 2.4 billion compared to Rs 4.5 billion in Q1 FY25 and a loss of Rs 11.5 billion in Q2 FY24. Ebitda loss at Tata Steel UK widened to Rs 15.9 billion versus loss of 9.6 billion in Q1 FY25 and Rs 13.7 billion in Q2 FY24 due to higher fixed costs marking its transition period after two BFs were shut down this fiscal.

• Net debt of Rs 888 billion compared to Rs 822 billion in Q1 FY25, higher by 8% sequentially largely to meet working capital and capex requirements.

• Expects 1.4 mt incremental deliveries in FY25.

Hindalco Industries Ltd.

Key highlights

• Ebitda of Rs 80.3 billion, up 42%/6% YoY/QoQ.

• Novelis reported quarterly shipment of 945kt (+1%/-1% YoY/QoQ), with an adjusted Ebitda of $489/tonne.

• India upstream segment Ebitda increased 79%/6% YoY/QoQ to Rs 37.1 billion, with margins averaging at 41% (versus 40%/26% in Q1 FY25/Q2 FY24), driven by lower input costs and higher alumina realisations.

• The downstream segment reported Ebitda of Rs 1.5 billion (-1%/+40% YoY/QoQ), with Ebitda/tonne at $142/tonne (-19%/+25% YoY/QoQ).

• The copper segment reported Ebitda of Rs 8.3 billion clocking a growth of 27%/3% YoY/QoQ led by multiple favorable factors and derivative gains.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.