Stocks of Indian steel companies are reeling from pricing pressure that is partly blamed on cheap imports. The stocks have declined up to 9 per cent on the NSE in one month, likely allowing investors an opportunity to use the correction to enter the pack as pricing pressure eases.
"In steel or any other commodity, if prices or spreads are nearing their bottom, it can be an opportune time to invest in those stocks. In India, domestic fundamentals such as steel consumption remain robust, hence one can take fresh positions in these counters," said Amit Dixit, an analyst at ICICI Securities.
Domestic steel spread is at ₹24,330 per tonne (the lowest since March 2024) and the price of hot rolled coil (HRC) is at 51,370 per tonne (the lowest since December 2020), said Dixit. The Nifty Metal index has fallen by 1.01 percent in the past month, while the NSE Nifty 50 has risen by 0.17 per cent, according to data from ACE Equity.
APL Apollo Tubes, which makes structural steel tubes, has dropped by 8.89 per cent, Steel Authority of India (SAIL) by 7.4 per cent, NMDC by 3.89 per cent, Jindal Stainless by 2.97 per cent, and Tata Steel by 2.41 per cent in one month.
This story is from the August 21, 2024 edition of Business Standard.
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This story is from the August 21, 2024 edition of Business Standard.
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