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Stocks of major steel companies are seen moving in a narrow range next week as inventory build-up over the past few months will counteract cues from likely pick up in domestic demand for the alloy. Expectations of a rise in local demand for steel from the infrastructure and construction sectors are expected to keep stocks of steel companies in the positive zone. The upside in the stocks is, however, limited ahead of Oct-Dec earnings of major steel producer such as Steel Authority of India Ltd and Tata Steel Ltd. Tata Steel Ltd's valuations are more attractive than that of Steel Authority of India Ltd.
We see greater visibility for TSL's (Tata Steel Ltd) India's earnings vs other India steel makers as volumes have been more resilient.Tata Steel will be detailing its earnings on Feb 13, while Steel Authority of India will detail its financial results on Feb 12.
Jindal Steel & Power Ltd is expected to take a hit in the coming sessions after Gujarat NRE Coke's Australian arm yesterday asked its shareholders to take no action on the steel producer's open offer to buy the latter. Jindal Steel & Power (Australia) Pty Ltd, a subsidiary of Jindal Steel and Power Ltd on Jan 31 made a takeover bid for the entire share of Australian arm of Gujarat NRE Coke at A$0.20 (11.06 rupees) per share. The takeover bid offer will commence on Feb 15 and is scheduled to end on Mar 15. Gujarat NRE Coke Australian subsidiary has said the company will release statement for its shareholders by Feb 14.
