Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has revised its outlook on the base metals sector from stable to negative for the next fiscal year (FY21), as the coronavirus outbreak, continuing US-China trade dispute and subdued global demand would keep base metal prices low in the near term.
However, the rating agency is expecting gradual improvement in the prices as the epidemic is contained and the second phase of US-China trade negotiations is concluded. As part of its study, the agency has covered the copper, zinc, aluminium and coal sectors.
Further, India Ratings and Research maintained a stable outlook for FY21 on the key rated sector entities, given the majority of them have an adequate liquidity position, strong financial flexibility, a low-cost position and a dominant market position.
The key sector participants include Vedanta, National Aluminium Company and Hindalco Industries. The agency is also expecting the entities to record, on a consolidated basis, revenue growth of 5.5%-6% year on year, EBITDA margins in the range of 18%-19% and a steady net leverage at around 3x in FY21.
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