Metal Stocks
Outlook for the week – 13 to 17.07.2015
(Downward bias; quarterly
earnings eyed)
( www.rupeedesk.in )
Stocks of major metal companies
are seen trading with a downward bias on expectation of subdued
quarterly earnings, but there
could be a 4-5% upside, due to heavy selling in the previous weeks.
Since metal stocks have entered
into an oversold zone, we can expect bounce back in them.
However, there could be
stock-specific movement following Apr-Jun earnings of metal companies,
which are expected to be tepid.
The margins of metal companies are seen declining as much as 126
bps in the June quarter.
Across the board, metal prices
continue to remain under pressure following poor economic data from
China. In Apr-Jun, JSW Steel's
margins are seen declining as falling steel prices was above the
expected raw material cost moderation.
We expect JSW Steel to report a 15% sequential decline in
EBITDA (earnings before interest,
tax, depreciation and amortisation per tn) to 4,200 rupees/tn.
