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Informist, Saturday, Feb. 1, 2024

MUMBAI – Shares of metal and mining companies are seen falling next week as there were no announcements related to the duty against imports by China in the Union Budget Saturday. This has raised concern around earnings in the coming quarters as the steel industry is struggling due to weak product prices. Further, analysts expect some volatility amid uncertainty regarding US President Donald Trump's policy on tariffs. 

Shares of most metal companies fell Saturday as there were no major infrastructure project announcements in the Union Budget, apart from few mentioned for Bihar, said Tushar Chaudhari, research analyst at Prabhudas Lilladher. During the Budget speech, Finance Minister Nirmala Sitharaman scrapped the customs duties on waste and scrap of a dozen critical minerals. The exploration of critical minerals will take approximately five to 10 years to complete, so scrapping the duty will not play a big role for the sector in the near term, another analyst covering the sector at a broking sector said.

When asked about the Union Budget, the analyst said the government's focus should be on increasing income levels of lower and middle class citizens rather than increasing consumption. Earlier during the day, Sitharaman announced in her speech that no tax would be levied till an income of INR 1.2 million. Analysts think the next big positive trigger for the steel sector would be the imposition of measures such as safeguard duty to reduce cheap imports from China.

When asked about the December quarter results of the companies in the sector, analysts said Hindustan Zinc and Vedanta reported good results. Good results were due to higher volumes and higher realisations of the zinc business. Post Vedanta's earnings, brokerage Emkay Global retained its 'buy' rating on the stock, but cut the target price by 4.2% to INR 575.

NMDC will report its December quarter earnings on Feb. 6. The company's net profit is expected to grow 36% on year to INR 20.34 billion, an average of estimates by nine brokerages showed. The company's top line is seen growing 20% on year to INR 64.85 billion, the estimates showed.

The Nifty Metal index fell 1.7% this week, compared with a decline of 1% last week. Shares of Jindal Steel and Power fell 12% and Hindalco Industries fell 3.4% this week. On other hand, Tata Steel rose 2.5% and JSW Steel rose 0.2%.

TOP HEADLINES
* Analyst Concall: See overseas zinc operating cost $1,200-$1,300/tn Vedanta
* Vedanta's subsidiary Bharat Aluminium boosts rolled products capacity
* Earnings Review: High volume, metal prices spur Vedanta sales, EBITDA growth
* Analyst Concall: Jindal Steel to spend more on value-added pdts, supply chain
* JSW Steel-Japan co JV completes thyssenkrupp Electrical Steel India buyout
* Earnings Review:Jindal Steel Oct-Dec PAT falls on flat revenue, higher spend
* Jindal Stainless' Oct-Dec net profit falls 20.6% on yr to INR 6.19 billion
* Usha Martin Oct-Dec consol PAT falls 14% YoY to INR 925.7 million
* Analyst Concall: Hind Zinc says will meet FY25 production cost guidance
* JSW Steel extends Minas de Revuboe buyout deadline to Jun 30 from Jan 31
* Analyst Concall:Tata Steel MD pushes for protectionism amid muted steel price
* Earnings Review: Hindustan Zinc Oct-Dec PAT up 30%, beats Street view
* Lloyds Metals Oct-Dec consol sales fall 12.4% YoY, PAT rises 17.4%
* Shyam Metalics Oct-Dec consol PAT rises 55.3% YoY to INR 1.98 billion
* Earnings Review: Tata Steel consol sales declines YoY, but beats Street view
* NCLT approves OCL Iron & Steel's resolution plan for Helios Photo Voltaic
* JSW Group wins copper mine contract from Hind Copper, to invest INR 26 bln
* Tata Steel to decommission coke oven battery in Jamshedpur Monday
* Analyst Concall: JSW Steel plans 28-mln-tn captive iron ore capacity by FY26
* Earnings Review: Fall in steel prices drags JSW Steel PAT for fourth quarter

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Akshita Kumar
Edited by Akul Nishant Akhoury

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