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Most of the steel sector stocks were trading under pressure after India Ratings and Research (Ind-Ra) in its latest report revised its outlook on the steel sector from 'stable-to-negative' to 'negative' for the next financial year (FY21), given the modest steel demand growth expectations of 5 percent and margin pressures led by iron ore price risks.
Steel Authority of India is currently trading at Rs. 35.30, down by 2.60 points or 6.86% from its previous closing of Rs. 37.90 on the BSE. The scrip opened at Rs. 35.35 and has touched a high and low of Rs. 36.70 and Rs. 34.95 respectively.
JSW Steel is currently trading at Rs. 237.95, down by 14.10 points or 5.59% from its previous closing of Rs. 252.05 on the BSE. The scrip opened at Rs. 247.00 and has touched a high and low of Rs. 247.00 and Rs. 235.10 respectively.
Tata Steel is currently trading at Rs. 382.15, down by 30.65 points or 7.42% from its previous closing of Rs. 412.80 on the BSE. The scrip opened at Rs. 401.90 and has touched a high and low of Rs. 401.90 and Rs. 373.45 respectively.
Ind-Ra also expects steel demand growth to remain modest, in line with gross factor capital formation of 5.3 per cent in FY21. It also said the Chinese steel demand growth risks amid increased ramifications from the corona virus outbreak could also impact global and domestic steel prices. However, it said some benefits are also expected on softer imported coking coal and international iron ore prices. It added that global steel prices may come at risk, if Chinese steel producers could not reduce production growth in FY21 in line with the reducing demand in housing construction and the slowing Chinese economic growth.
The agency further expects the overall steel margins to remain modest in FY 2020-21, with slight improvements after the industry witnessed EBITDA margins dropping. However, it expects the margins to bottom out in Q4FY20. It also believed that in case the steel demand does not strengthen up by 2HFY21 (second half of FY 2020-22) new capacity additions along with stressed asset ramp-up could put further pressure on the prices and plant capacity utilisation rates.
| Company Name | CMP |
|---|---|
| JSW Steel | 919.70 |
| Tata Steel | 183.05 |
| SAIL | 153.65 |
| Jindal Stainless | 815.60 |
| Jindal Saw | 560.50 |
| View more.. | |
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
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Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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