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Indian metal companies are expected to report strong earnings in June quarter, as steel firms will benefit from the recent price hikes, says Jefferies.
The brokerage says Tata Steel's group EBITDA is expected to be about Rs 7,200 crore ($1.05 billion), a rise of 11 per cent compared with the previous quarter. Jefferies sees Hindalco Industries Ltd's India business post a 14 pct EBITDA growth to Rs 1,830 crore Q/Q.
Steel Authority of India is expected to show Q/Q EBITDA growth of 2 per cent, while volumes are seen falling 12 per cent Q/Q, and input costs rising due to higher coking coal costs. Focus will remain on the outlook, with domestic steel prices down 3-10 per cent led by a lull in seasonal demand, the brokerage adds.
It warns that regional prices/spreads could be moderate as Chinese output remains high, and demand may recede after a seasonally strong period.
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