Ind-Ra: Indian steel industry outlook maintained at ‘stable’ for H2 FY 2021-22

Tuesday, 05 October 2021 11:01:32 (GMT+3)   |   Kolkata
       

India Ratings and Research (Ind-Ra) has maintained its outlook for the domestic steel industry at ‘stable’ for the second half of the fiscal year 2021-22 although cautioning that rising coking coal prices could moderate per ton earnings before interest, tax, depreciation and amortization (EBITDA), a report from the rating firm said on Tuesday, October 5.

“However, absolute EBIDTA is likely to be compensated for adequately by robust sales and elevated price levels and the softening of iron ore prices,” the Ind-Ra report said.

Coking coal prices increased by 150 percent year on year in mid-September this year and are likely to remain volatile. Iron ore prices could be corrected with supply improving gradually, but remain elevated due to structural changes after mine auctions, the rating firm said.

The capital expenditure intensity over FY 2022-23 is likely to remain steady, while some of the capex is near completion and the balance will be implemented in a phased manner, but with a bulk of cash outflows in FY 2024-25, the report said.


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