More Stories

Informist, Friday, Feb. 21, 2024

MUMBAI –  Shares of metal companies are seen higher amid hopes of better earnings and valuations as some stocks are at attractive levels after correction, analysts said. US President Donald Trump's proposal to impose 25% tariffs on steel is unlikely to have a direct impact on the metal sector as the Indian metal industry is not highly dependent on exports to the US market, they said.

Analysts are also positive on the metal sector in the near term as the December quarter earnings were not as bad as feared. Earnings were strong and resilient despite challenges, and even met consensus expectations and surpassed on some occasions owing to better volumes, an analyst tracking the metal sector, said. According to an analysis by Informist, the cumulative net profit, excluding exceptional items, of eight metal and mining companies in the Nifty 200 index rose 5% on year compared with analysts' expectation of a 7% fall.

"Valuations look quite attractive from the current levels ahead," the analyst said. The analyst believes this might be a good time to look towards metals as the negatives are mostly priced in.

Shares of metal companies have risen amid hopes of a safeguard from the government with some media reports saying an import duty of 15-25% on steel imports could come in six months. "The incremental import duty, if implemented could be a significant positive for the industry aiding steel prices, which in turn, will increase margins. The US imposing 25% tariffs on steel imports could also lead to countries like South Korea and Japan diverting their exports to India, further strengthening the case for import duty (hike)," JM Financial said in a research report.

At the current levels, companies such as Hindalco Industries, Vedanta, and NALCO are expected to generate upcycle profitability and returns, brokerage Emkay Global said in a research report. Spot aluminium prices are 3.3% above Emkay's forecast of $ 2,600 per tonne, resulting in an upside skew for these companies, the brokerage said.

Friday, the Nifty Metal index surged 1% and ended at its highest level in a month at 8609.7 points. The index extended its gains for the fifth straight session. The Nifty Metal rose 5.2% this week, as compared to a fall of 4.6% in the previous week. Shares of Hindalco Industries rose 7.8% and Steel Authority of India rose 6.7% during the week.

TOP HEADLINES
* Tata Steel acquires 1.91 bln shares of arm T Steel Holdings for $300 mln
* Tata Steel arm gets UK port body's approval to set up electric arc furnace
* PRESS: NALCO finalises INR 300-billion capex plan by FY30
* Analyst Concall: Hindalco Industries sees FY26 India capex INR 80 bln

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

US$1 = INR 86.71

Reported by Akshita Kumar

Edited by Saji George Titus

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.