New Delhi, April 9. Ferrous companies are likely to post strong fourth quarter (Q4) results as prices of hot-rolled coil and rebar rose sharply, driving up revenues and offsetting higher coking coal costs, a report said on Thursday.
The report from Emkay Global Financial Services said that "COAL is likely to report strong on-quarter EBITDA growth, among mining stocks, surging over 46 per cent or Rs 115 billion". The growth is supported by higher e-auction revenues and improved demand amid rising power demand.
Prices of HRC and rebar climbed about 14 per cent and 21 per cent respectively on a sequential basis. The increase was driven by strong demand, accelerated government infrastructure spending, and the implementation of safeguard duties at the end of Q3.
"We assume coverage on the metals pack with a neutral-to-positive stance across ferrous and non-ferrous players," the report said.
It expected Steel Authority of India Limited (SAIL) to lead the gains in Q4, supported by a favorable product mix skewed toward long products. Non-ferrous should see healthy growth on stronger aluminum or silver prices and the depreciation of the Indian rupee, benefiting a few private players. Mining and others may remain a mixed bag, the report said.
Coking coal costs rose to an average of $232 per tonne in Q4, up from $199 per tonne in Q3, which will exert modest pressure on EBITDA spreads of ferrous players even as revenues more than offset input inflation.
The report forecasts the non-ferrous sector to deliver healthy sequential earnings growth, aided by roughly 13 per cent higher aluminum prices, a sharp 51 per cent surge in silver, a modest 2 per cent uptick in zinc, and around 3 per cent depreciation of the rupee.
Mining and related segments are likely to show divergent performance.
The report said that estimated earnings over fiscal 2027–28 for ferrous players will be supported by extended safeguard measures, expected demand growth of about 8 per cent, and China's production cuts.
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