Steel Stocks Outlook: 23-27.07.2012
Stocks of steel companies are seen choppy next week tracking the key stock
indices and taking cues from JSW Steel Ltd's Apr-Jun earnings. In the broad
market, trade is expected to be largely rangebound as several companies are
slated to report quarterly earnings and due to the expiry of the July
futures contract. The National Stock Exchange's 50-share Nifty is expected
to trade in the 5150-5300 range next week. One of the key steel players,
JSW Steel, will report its first quarter earnings on Thursday.
Higher interest cost and foreign exchange losses
is likely to weigh on the company's net profit on a consolidated basis. The
company's consolidated revenues are seen at 87.66-98.95 bln rupees as
compared with 74.32 bln rupees in a year ago quarter and 101.53 bln rupees
in Jan-Mar. Commissioning of 2.9 mln tn capacity in 2012 is likely to
improve the company's sales volume and in turn revenues compared with the
year ago quarter. JSW Steel's Apr-Jun crude steel production rose 27% on
year to 2.14 mln tn and the company's 10-mln-tn plant at Vijayanagar in
Karnataka operated at 80% capacity during the quarter. We will watch out
for management's comments on any changes in volume outlook for 2012-13
(Apr-Mar) as certain mines in Karnataka are likely to resume operations in
August. JSW Steel expects to return to normal capacity in next two months
from August on fresh supply of ore from these mines.
By RUPEE DESK [email protected] www.rupeedesk.in
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