Indian steel stocks have rallied in the last few weeks, outperforming the benchmark equity index. The rally was mainly on the back of expectations of reduction in export duty.
Steel companies had taken a beating after the government imposed a 15% export duty on a range of finished steel products in May ’22. Exports had turned lucrative for Indian steel makers in the last few years.
For instance, for the first time in two decades, China was a net importer of steel for a few months in 2020. This was unprecedented. China’s production had lagged domestic consumption in recent times, which boosted international prices. Indian companies too benefited from this demand-supply mismatch.
Sensing the opportunity, Indian steel makers exported a good amount of steel at remunerative prices since 2020. According to Crisil Research, steel exports from India reached a record high of around 18.3 million tonnes in fiscal year 2021-22.
With higher realization per tonne of steel sold, Indian companies used the opportunity to deleverage their balance sheets and gain global market share. This explains the rally of steel companies on the Indian bourses since 2020.
While the imposition of import duty in May led steel companies to slide on the Indian bourses, there are speculations that the government may roll back the hike in import duty in phases.
IMPORT DUTY IMPACT
この記事は Beyond Market の August 2022 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、8,500 以上の雑誌や新聞にアクセスしてください。
すでに購読者です ? サインイン
この記事は Beyond Market の August 2022 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、8,500 以上の雑誌や新聞にアクセスしてください。
すでに購読者です? サインイン
IMPORTANT JARGON
TRANSITIONING SFBs TO UBs: RBI’s NEW GUIDELINES - The Reserve Bank of India recently issued new guidelines outlining the transition process for Small Finance Banks (SFBs) to become Universal Banks (UBs).
NAVIGATING INDIA'S MARKET WITH HOWARD MARKS
Howard Marks' focus on cycles and capital preservation translates to a defensive strategy for India's frothy market: prioritize cash, target undervalued sectors, and diversify
FINDING A BETTER FIT
Switch health insurers at renewal to keep benefits such as waiting period and bonus, but weigh drawbacks
SILVER SQUEEZE
Green tech boom strains supply, propelling silver as a sustainable investment
A PODCASTING FUTURE
India's podcast scene explodes with formats and listeners, primed for digital growth, with high-quality content reigning supreme
BOUNCING BACK WITH DOMESTIC FOCUS
Despite challenges, India's tyre industry remains optimistic about doubling revenue by 2032
HIGHWAY HICCUPS?
Slowdown in awarding highway projects, driven by industry factors and project complexities, pushes NHAI towards debt reduction and private partnerships for sustainable development
CONTENT CONQUEST
JIOCINEMA'S ULTRA-LOW PLAN SHAKES INDIA'S STREAMING SCENE, AIMING FOR AD REVENUE AND LEVERAGING STRENGTHS TO BECOME A BIG PLAYER
CAUGHT BETWEEN CAUTION AND GROWTH
RBI's draft on project financing seems to be a pre-emptive measure to prevent large defaults on infrastructure loans. However, in their current form, the requirements look onerous for banks
HOT OR HYPE?
India's 2024 IPO market sizzles with investor cash, but will it be a blockbuster or a box office flop? Valuation worries linger