Tata Steel To JSW Steel: Over Half Of Nifty Metal Companies See Earnings Downgrades For FY25
Out of all the Nifty Metal constituents, average consensus Bloomberg net profit estimates for JSW Steel and APL Apollo Tubes have been cut the most at 43% and 36%, respectively.
There is vast difference between the net profit growth that analysts expected from Nifty Metal constituents at the start of fiscal 2025, compared to today.
As per data analysed by NDTV Profit, at the start of the financial year, analysts expected net profits of all Nifty Metal companies to grow on an annual basis. However with first half of the year gone by, 57% of the Nifty Metal index constituents have seen earnings downgrades, with seven companies expected to see lower or negative net profit growth in FY25 now.
Change In Net Profit Expectations
Out of all the Nifty Metal constituents, average consensus Bloomberg net profit estimates for JSW Steel Ltd. and APL Apollo Tubes Ltd. have been cut the most at 43% and 36%, respectively. Analysts now expect JSW Steel to see a 4.6% annual drop in fiscal 2025 net profits, compared to a 68% growth earlier. For APL Apollo Tubes, analysts expect revenues to grow 1.2% during the fiscal, compared to 60% earlier.
Other companies that saw earnings downgrades include Jindal Stainless, Jindal Steel & Power Ltd., JSW Steel, National Aluminium Co., NMDC Ltd., Ratnamani Metals & Tubes Ltd., Steel Authority of India Ltd. and Tata Steel Ltd.
Estimates of Hindustan Copper Ltd. were not available.
Post the estimate changes, companies like Jindal Stainless and Tata Steel could see lower rate of net profit growth in fiscal 2025, while Jindal Steel and Power and Welspun Corp. could see a fall in total net profits.
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Change In Revenues Expectations
On the revenue front, 10 constituents have seen downgrades. Post these estimate changes, the companies that are expected to see the highest revenue growth include APL Apollo Tubes, Hindalco Industries Ltd., Hindustan Zinc Ltd. and Jindal Stainless. The companies that are expected to see the lowest annual revenue growth in fiscal 2025 include Welspun, Hindalco Industries, Steel Authority of India and Tata Steel.
These downgrades come due to the weak pricing environment seen across different metals due to the poor economic scenario in China. However, the country's latest stimulus package has caused prices across boards to see some uptick.
Margins
The companies that have seen estimate cuts on their margins include APL Apollo Tubes, Jindal Stainless, JSW Steel, Ratnamani Metals & Tubes and Tata Steel.
Post the downgrade, all the companies except Tata Steel and Jindal Stainless, are expected to see higher margin contraction in fiscal 2025, compared to what was projected earlier.
The companies that have seen an upgrade in their margin estimates include Adani Enterprises Ltd., National Aluminium, NMDC and Vedanta Ltd.
Disclaimer: NDTV Profit is a subsidiary of AMG Media Networks Limited, an Adani Group Company.
