Indian steel industry earnings over the 12 months of the current fiscal year of 2023-24 will moderate compared to the previous fiscal year of 2022-23, but the industry outlook has been maintained at “positive”, Indian ratings agency ICRA said in a steel sector report on Friday, June 16.
Industry capacity utilization levels will be around 80 percent in FY 2023-24, after a gap of eight years, and, buoyed by the prospects of large infrastructure spending plans, domestic steelmakers have announced sizeable capacity expansions aggregating at about 34 million mt per year to be commissioned by 2025-26, the report said.
ICRA noted that, notwithstanding the sizeable expansion plans, given the deleveraging that has happened over the last six quarters, and the healthy cash flows likely to be enjoyed, the steel industry today is more resilient to withstand project-related risks, which had significantly weakened the sector’s credit profile during the previous capex cycle of fiscal years 2011-12 to 2015-16.