Amit Dixit, the senior steel analyst with brokerage firm Edelweiss Financial Services, has a buy call on Jindal Steel and Power Ltd (JSPL) with a target price of Rs 140.
Talking on increased hot-rolled coil (HRC) prices, he said, “My channels check also with dealers and companies suggest likewise. We will have to wait and see whether these prices are absorbed in the market. We see the continuous decline and the sustained decline has been arrested in part. It is too early to call an end game to the price decline. But nevertheless, it is a positive development I would say.”
“HRC prices have stabilised in the key markets particularly in east and west and in the major cities. However, it is the longs that interest us. If you see longs and bifurcate it into two parts between secondary players and the primary large players in the secondary market, we have seen some semblance of stability, the price has been range-bound between Rs 30,500 and Rs 31,000 a tonne,” Dixit added.
“However, we hear that there have been some price increases by a few players and as far as the large producers are also concerned in longs. So longs, we hear a price increase of roughly Rs 700-1,000,” he further added.