The Investment Information and Credit Rating Agency (ICRA) has revised its domestic steel demand projection for FY24 to 9-10 percent, Powered by the government’s infrastructure-oriented growth model.
The ratings agency had predicted 7-8 percent growth at the start of the fiscal year. Between FY2022 and FY2024, the domestic steel sector is predicted to grow at a double-digit CAGR of 10.5-11 percent. Domestic steel demand increased at a CAGR of 12.7 percent from FY2006 to FY2008.
From April to August of FY24, domestic steel demand surged by 13.1 percent, driven by the government’s infrastructure investments.
ICRA’s research revealed that central government capital expenditure grew by 59.1 percent year-on-year in Q1 FY24, indicating increased infrastructure spending ahead of the 2024 elections. In synchronization with demand, steel companies are increasing capacity. Around 14.3 million tonnes (mt) of new steelmaking capacity is expected to come on-stream in FY24, according to ICRA.
According to ICRA, domestic hot-rolled coil (HRC) prices are trading at a premium of $40-45 per tonne over current Chinese free-on-board (FOB) spot export bids. Despite the positive demand expectation, domestic HRC prices fell by 8 percent in Q1FY24.However, due to easing input cost pressures.
Here are the seven steel stocks that gained up to 17.5% after ICRA revised the rating
Tata Steel Ltd shares gained 3.5 percent to Rs 134.20 on Thursday from the previous close price, the company has a market valuation of Rs 1,60,957 crores.
Jindal Steel & Power Ltd shares rose 3.5 percent to Rs 716.50 on Thursday from the previous close price, with a market value of Rs 72,645 crores.
Steel Authority of India (SAIL) Ltd shares gained 3.5 percent to Rs 99.45 on Thursday from the previous close price, the company has a market capitalization of Rs 40,685 crores.
Kalyani Steels Ltd shares rose 17.5 percent to Rs 548.90 on Thursday, up from the previous close price of Rs 466.90 crores.
Cosmo Ferrites Ltd shares rose 10 percent to Rs 292.25 apiece from the previous close price, The company has a market capitalization of Rs 351 crores.
Jai Balaji Industries shares rose 5 percent to Rs 359.65 on Thursday from the previous close price, with a market value of Rs 5,770 crores.
Vaswani Industries Ltd shares gained 8.13 percent to Rs 29.25 on Thursday from the previous close price, the company has a market valuation of Rs 85 crores.
Written by Omkar Chitnis
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