Steel companies have increased prices for the third consecutive month by ₹2,000-2,700 per tonne in October, driven by buoyant demand and spike in raw material costs. According to The Hindu BusinessLine, hot-rolled coil prices have risen to ₹64,700 per tonne against ₹62,000 logged in September, with domestic steel demand remaining resilient despite broader macroeconomic inflation concerns. The ongoing geopolitical uncertainty has pushed up costs on imported key raw materials including coking and thermal coal, ferro-alloys, and shipping costs, while domestic fuel and power costs have also contributed to the cost push. As per Choice Institutional Equities analyst Bhavik Bhagwanji Shah, the steady rise in steel prices is driven by surging global coking coal costs, iron ore supply tightness, and firming energy expenses. Despite Chinese oversupply pressures weighing on international prices, India's robust domestic consumption and capacity utilisation have helped underpin the domestic market outlook.
Global investment bank Jefferies has selected Welspun Corp and JSW Steel as its preferred picks among metal stocks for Q2FY27, according to reports from The Financial Express. The investment bank expects India's metal and mining companies to post good numbers for the second quarter of financial year 2027. Jefferies remains positive on the sector as volume growth is expected to drive earnings in Q2FY27. The bank's preference for Welspun Corp stems from its positioning to benefit from a multi-year upcycle in oil & gas infrastructure spending in the US and Middle East, supported by local manufacturing in both regions.
According to Jefferies analysis reported by The Financial Express, Welspun Corp is well positioned to benefit from a multi-year upcycle in oil & gas infrastructure spending in the US and Middle East, supported by local manufacturing in both regions. The company is expected to deliver its sixth consecutive quarter of double-digit EBITDA growth, with Q2FY27 EBITDA seen rising 19% year-on-year. Strong order execution in the US will more than offset weakness in India, where pipe sales volumes are expected to fall 16% due to continued weakness in the domestic market. Jefferies prefers Welspun Corp as it sees a huge opportunity from the growing investment in oil and gas infrastructure in the US and Middle East.
According to Jefferies analysis reported by The Financial Express, volume growth in the sector will be led by Shyam Metalics and Energy with 21% YoY growth. Tata Steel's volumes are also expected to rise 8-10%, while Coal India reported a 12% increase. Jindal Stainless' sales are expected to rise a modest 3% YoY, reflecting production disruptions early in the quarter, and Hindalco's India aluminium sales are projected to remain flat YoY. Tata Steel's standalone EBITDA per tonne is expected to decline 8-9% sequentially, with consolidated EBITDA estimated to rise 9%. Jindal Stainless' EBITDA is projected to recover 9% sequentially from the production constrained June quarter.
As reported by The Financial Express, Hindustan Zinc's EBITDA is expected to rise 7% sequentially, mainly due to higher zinc prices and strong growth in silver volumes. Jefferies expects Hindalco's consolidated EBITDA to fall 17% QoQ but rise 29% YoY, led by a 15% QoQ fall in India aluminum EBITDA per tonne due to lower aluminum prices. The investment bank also expects Novelis's adjusted EBITDA per tonne to decline 9% QoQ to $511. According to Geojit Investments analyst Antu Eapen Thomas, supply-side constraints due to maintenance shutdowns at some mills have tightened near-term availability, while imports have become less competitive due to the safeguard duty and rupee weakness. With key inputs such as coking coal and iron ore prices expected to remain firm or trend higher in the near term, steel mills will maintain defensive pricing floors.
