Valuations capture upsides for listed steel majors

There are some signs of optimism about India’s steel sector, despite recent moderation in steel prices and unseasonal weather affecting construction.

- DEVANGSHU DATTA

China has started cutting steel production since April 2025 and it is likely to implement yet another stimulus package for its real estate sector. Both measures are positive for the global steel industry. The production cuts are also expected to continue, restricting the flood of cheap Chinese exports while the stimulus may result in better offtake within China.

In India, growth remains strong with steel consumption and production increasing, Itis likely that prices have bottomed out or are very near to bottoming. Growth momentum could sustain into FY27 or FY28, due to infrastructure building, manufacturing growth, and resilient real estate demand. Between FY25-28, there could bean operating profit growth of over 20 percent for many listed steel firms.

Inthe first four months of FY26, crude steel production rose 9 per cent in India year-on-year (Y-0-Y) and consumption increased 8 per cent Y-0-Y. After the safeguard duty, net imports for April-July’25 declined to 0.37 million tonnes or MT from 0.99MT a year earlier. This drop has reduced import pressures and gives pricing support to local producers.