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Stocks of frontline steel companies are unlikely to gather momentum in the coming week due to subdued demand in the automobile and infrastructure sectors, which are the key consumers of the alloy. Stocks of steel companies might not pick up in the short run. The falling trend can continue in the absence of any growth triggers. Market players are not also expecting good prices and do not see demand picking up because of slow economic growth. There is no near-term rebound seen in the stocks of steel making companies. If stocks trade below their near-term support, they may slide further. Stocks of Tata steel may gain if market picks up and if Tata Steel Europe's results come out and show good margins.
The Apr-Jun results of SAIL are due on August 14. We expect weak results. We have estimated a 50% decline in net profit. The result of the company for Apr-Jun showed 28% increase that can be mainly attributed to its subsidiary Jindal Power Limited while the foreign and other subsidiary companies have disappointed. The company revised its capital expenditure guidance by 40% two days ago to 120 bln rupees.
Stocks of frontline steel companies are unlikely to gather momentum in the coming week due to subdued demand in the automobile and infrastructure sectors, which are the key consumers of the alloy. Stocks of steel companies might not pick up in the short run. The falling trend can continue in the absence of any growth triggers. Market players are not also expecting good prices and do not see demand picking up because of slow economic growth. There is no near-term rebound seen in the stocks of steel making companies. If stocks trade below their near-term support, they may slide further. Stocks of Tata steel may gain if market picks up and if Tata Steel Europe's results come out and show good margins.
The Apr-Jun results of SAIL are due on August 14. We expect weak results. We have estimated a 50% decline in net profit. The result of the company for Apr-Jun showed 28% increase that can be mainly attributed to its subsidiary Jindal Power Limited while the foreign and other subsidiary companies have disappointed. The company revised its capital expenditure guidance by 40% two days ago to 120 bln rupees.
