India Ratings and Research (Ind-Ra) in its latest report has said that the Indian steel sector outlook, on the back of strong domestic demand from government and private sectors, is likely to remain firm amid concern of global demand uncertainties in the current fiscal (FY23). It has maintained a '’neutral outlook’ on the steel sector for FY23 in view of high raw material inflation that would result in elevated prices and moderation of volume and margin.
Ind-Ra also expects that infrastructure spending by the government will support steady domestic consumption. It said the government has allocated Rs 111 trillion for the National Infrastructure Pipeline (NIP) to be spent over the next five years while for the private sector capital expenditure, housing and consumer durables end-user segment, the demand growth would remain muted due to elevated prices.
According to the report, steel players may find it challenging to pass on the cost inflation completely. Although this could moderate absolute EBITDA, it would remain higher than the pre-pandemic levels. Lower Chinese production and exports, and an increase in quota limit for exports to European markets, due to the ongoing Ukraine-Russia war, Indian steel players are likely to benefit. As such, the margin in exports sales mix is likely to be higher in FY23, cushioning the profitability.
Start Research-backed Investing ...Now. Subscribe to Sapphire
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: