Tata Steel, JSW Steel among top metal stock picks by PhillipCapital
Premium- Vedanta and NMDC to report strong Q4 performance while Hindalco may suffer on cost hit in Novelis, as per brokerage PhillipCapital
Aluminium, Zinc and lead average LME improved 19%, 12% and 2% sequentially while Rupee depreciated 30 basis points (bps). Volumes for most companies are expected to report healthy QoQ growth while CoP is expected to jumped 9-10% largely due to higher power cost, as per brokerage house PhillipCapital.
"Alumina prices fell 6% on a sequential basis. Overall, we expect operating performance to improve meaningfully for most of the players. Vedanta and NMDC to report strong performance while Hindalco may suffer on cost hit in Novelis," the note on Q4FY22 results preview for the metals sector stated.
PhillipCapital likes ferrous space over nonferrous. In Ferrous, from medium term perspective, the brokerage likes Flat steel players as long demand and pricing may get impacted during monsoon period. Tata Steel, JSW Steel and Jindal Steel and Power (JSPL) remained its top stock picks.
In non-ferrous space, the brokerage had recommended to book profits in Hindalco at around ₹620. Nalco and Vedanta, now, to give relatively better return due to expectation of strong financial performance, PhillipCapital.
It believes that the non-ferrous space to benefitted meaningfully as average LME for Aluminium, Zinc and Lead improved while INR depreciated. Overall, the brokerage expects operating performance to register healthy growth on sequential basis for non-ferrous pack.
“We believe that raw material costs will taper off while steel prices will remain firm on supply constrains and thus for non-integrated players the EBITDA/t is expected to remained flattish or register marginal growth. For integrated players EBITDA/t to remain flat or marginally decline in some case," the brokerage note added.
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The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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