Metal Stocks Outlook for the week – 23 to 27.06.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Stocks of metal companies are likely to see some relief next
week after a bout of profit
booking this week. Announcement of the hike in rail freight
and passenger fares post
market hours yesterday is not seen as a negative for metal
stocks. The government
yesterday announced a hike in rail passenger fares by 14.2%
and freight rates by 6.4%
from Jun 25. Steel companies Steel companies will be able to
pass on the increased costs.
It cannot be seen as a negative for the sector Steel
companies use the rail network to
transport raw material to and from their factories.
Rating agency CRISIL today downgraded its long-term rating
on Hindalco Industries'
bank facilities and debt programmes to AA/Stable from
AA+/Stable on expectations that
the company's debt-to-operating profit levels will take
longer than expected to improve.
Hindalco stocks are seen in the 155-172 rupees range next
week.
The Supreme Court on Jun 18 refused to urgently hear a
petition challenging divestment
in Hindustan Zinc Ltd and posted the case for hearing in
July. The divestment is seen as a
trigger for Sesa Sterlite, as its parent Vedanta Resources
is keen to buy the rest of the
government's stake in Hindustan Zinc. The buyout is expected
to allow Sesa Sterlite
access to Hindustan Zinc's cash-pile. Vedanta Resources
holds 58.3% stake in Sesa
Sterlite, which in turn holds 64.9% stake in Hindustan Zinc.
