Tag: metal stocks

Metal stocks under pressure, Nifty Metal down 3.7%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Metal stocks were under selling pressure on Thursday amid weak domestic cues, with the Nifty Metal Index falling as much as 3.7 percent in intraday trade. At 11:30 am on Thursday, of the 15 constituents of the Nifty Metal Index, all were trading in red except Hindustan Zinc Ltd, which was up 2 percent.

Among the biggest losers were Hindalco Industries Ltd (down 4.7 percent), Jindal Steel and Power Ltd (down 3.4 percent), Tata Steel Ltd (down 3.2 percent) and National Aluminium Co. Ltd (down 2.8 percent).

Other metal stocks that took a hit included Steel Authority of India Ltd (SAIL, down 2.2 percent), Hindustan Copper Ltd (down 2 percent) and JSW Steel Ltd (down 2.5 percent).

Notably, the Nifty Metal Index has fallen nearly 7 percent in the last one month amid a decline in the broader markets. The Nifty 50 index has also fallen 5.8 percent during this period.

In an interaction with CNBC-TV18 on Thursday, ICICI Securities analyst Amit Dixit said that there was some fear of recession in the metal sector, particularly in the non-ferrous space.

He pointed that all the metal mining stocks were trading nearly 13 to 15 percent lower than their historical valuation band.

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“We are more cautious on the non-ferrous space compared to the ferrous one,….of course, macro risk notwithstanding, we believe that in case of metals, particularly ferrous, things look to be bottoming out,” said Dixit.

On the steel sector, Dixit said that the companies that are focused more on exports will benefit going ahead.

“If you talk about the (preference) order – JSPL, followed by Tata Steel, followed by JSW Steel,” he added.

Meanwhile, leading global analytics company CRISIL Ltd in a report on Thursday said that the domestic steel sector may be one of the beneficiaries of production-linked investment (PLI) schemes in the next fiscal year as it is expected to push investments in the space. This may augur well for the steel stocks in the near to medium term.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ratnamani Metals ends off day’s high despite two-year high EBITDA margin

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ratnamani Metals and Tubes Ltd.’s shares jumped over 3 percent in intraday trade on Tuesday after the pipes and tubes manufacturer reported a 19 percent growth in its net sales at Rs 1,099 crore for the December quarter.

The company’s other income was at Rs 7.39 crore as against Rs 10.73 crore in the corresponding quarter a year ago.

Profit after tax jumped 50 percent to Rs 134 crore from Rs 89 crore in the year-ago period.

The company improved its operating performance in the December quarter as its EBITDA jumped 53 percent to Rs 199 crore as against Rs 130 crore in the year-ago period.

The company reported its best margins at 18 percent for the December quarter since January-March of the financial year 2021. Margins were at 16 percent in the September quarter and at 13 percent in the June quarter.

The Group is engaged in manufacturing steel tubes and pipes.

The company on October 5, 2022, entered into a share purchase agreement to acquire a 100 percent stake in Ravi Technoforge Pvt. Ltd. On October 28, it completed the acquisition of 53 percent in the first tranche for Rs 97.88 crore.

The total purchase consideration is to be paid in three tranches over the period based on the performance metrics and other terms and conditions as per the definitive agreements for the subscription of equity shares and acquisition.

Shares of Ratnamani Metals and Tubes ended 0.46 percent higher at Rs 2,120 on Tuesday.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

JPMorgan is puzzled by this steel stock but another analyst sees over 50% upside in it

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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While the rally in metal stocks has picked up, global brokerage firm JPMorgan in its latest note, said it finds Steel Authority of India (SAIL) and National Aluminium Company’s (NALCO) underperformance puzzling, given attractive valuations and earnings Beta.

The brokerage noted that SAIL is the worst-performing Indian steel stock, though earnings Beta to steel price is the highest while net debt is the lowest. Beta gauges a stock’s responsiveness to changes in the bourses. JPMorgan has an overweight stance on the public sector steelmaker with a target price of Rs 115 per share, meaning a 26 percent upside from Wednesday’s closing price.

However, Equirus expects a 54 percent rise in the SAIL share price, and the stock is its top pick as Jindal Steel and Power has already seen a sharp re-rating and also there is uncertainty surrounding Tata Steel Europe. The brokerage has revised SAIL to ‘long’ from ‘add.’

On the other hand, JP Morgan says that China re-opening, better-than-feared Europe economic data, and investor flows into commodities drive equities higher. The brokerage forecasts a 25 percent higher than consensus on FY24 and sees an earnings upgrade cycle for SAIL.

Equirus has called SAIL a proxy play on higher iron ore prices globally. It said SAIL and Tata Steel benefit disproportionately when seaborne prices remain elevated.

SAIL can strengthen its balance sheet significantly amid muted capex, the brokerage said, adding that it believes any material expansion-based capex would happen post FY25E.

The steelmaker’s operating leverage alone shall bring benefits of Rs 2,500-300 per tonne while volume growth shall bring in benefits of Rs 1,800- 2,000 per tonne, adding that the company is likely to report a US$ 2 billion base case EBITDA for FY24E. Meanwhile, employee costs are a major portion of other costs.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Shyam Metalics and Energy shares shine as Street cheers Mittal Corp acquisition

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shyam Metalics and Energy’s shares rallied over nine percent on Wednesday after the integrated metal producer concluded its acquisition of Mittal Corp with a foray into the stainless steel/ wire rod and bar mill business. With this acquisition, Shyam Metalics’ manufacturing business would enter into Madhya Pradesh with additional capacities of 1,50,000 tpa of stainless steel/ wire rod and bar mill. It is aimed at expanding existing 8.85 MTPA production capacity to 14.45 MTPA, the firm said in an exchange filing.

“Ferro Alloys, a key input material for Stainless Steel, is extensively produced by our existing companies. The government has mandated a minimum 20 percent use of stainless steel in coastal areas which ensures a very stable demand for these products,” it said.

Brij Bhushan Agarwal, VC and MD, Shyam Metalics & Energy, told CNBC-TV18 that the plant is functioning but the capacity utilisation is very low and once his firm takes complete control of the plant, it will be run from next year at full capacity. The total acquisition value will be around Rs 450 crore, he added.

In its regulatory filing, the company added that capex spending shall grow to Rs 10,000 crore in the next five years to meet the organic and inorganic growth plans through internal accruals.

“With this development, Shyam Metalics has embarked on a ‘diversification approach’ in the metal space to chart the company’s growth journey and has proposed to further invest Rs 7500 crore over the next five years,” the firm said.

Agarwal said, “Next year onwards, we expect a revenue of somewhere around Rs 2,000 crore of this plan. And down the line in the next two to three years, we will be doubling the capacity in stainless steel. We expect the next three to four years to be more prudent, we should be able to generate a revenue of around Rs 4,000-5,000 crore in the stainless steel segment.” 

The current manufacturing plants in West Bengal and Odisha which employ more than 15,000 people will further see an addition of 10,000 jobs to the entire workforce post expansions, it added.

Agarwal noted that the market is now turning better after the change in the import-export duty withdrawal by the government. It is looking positive and demand seems to be on the better side while margins are increasing because of cooling off coal prices.

SMEL has already invested Rs 2,400 crore out of the Rs 3,950 crore existing capex plan of the company in the last two years. The new investment will also help Shyam Metalics bet big on its exports and expand geographies to newer markets which currently stands at 40+ countries with a contribution of 16 percent to the overall business.

Also Read: IIFL initiates buy on Shyam Metalics; check out target price, other details

Earlier in 2021, SMEL acquired the aluminum foil metal space and implemented one of India’s largest aluminium foil rolling plant in India in West Bengal. In 2022, the firm also took control of Ramsarup Industries Limited through NCLT which will help facilitate inorganic growth in the steel space.

Shyam Metalics has a very large basket of metal products under one roof. The company produces and sells pellets, sponge iron, billets, TMT rods, wire rods, angles, channels, beams, ferro chrome, ferro silicon, silico manganese, low carbon ferro chrome and aluminium foil products. Post-acquisition and expansions there will be an addition of pig iron, DI pipes, stainless steel/ wire rod and bar mill.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Lloyds Metals shares fluctuate despite company returning to operational profitability

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Lloyds Metals” isinid=”INE281B01032″ bseid=”512455″ nseid=”LLOYDMETAL” sector=”Steel – Sponge Iron” exchange=”bse”]

Shares of Lloyds Metals and Energy are fluctuating in Wednesday’s trade even after the company registered an operating profit for the September quarter.

The Mumbai-based company reported a net profit of Rs 142 crore in the September quarter, compared to a net profit of Rs 31 lakh during the same period last year.

EBITDA or the company’s operating profit surged to Rs 156.9 crore, compared to an operational loss of Rs 60 lakh in September 2021.

Shares of the company jumped as much as 3.7 percent in early trading on Wednesday only to pare all of them by 11 AM.

However, the stock has more than doubled in value over the last 12 months and has gained 80 percent so far this year.

On the topline front, the company’s revenue increased to Rs 673.6 crore, compared to Rs 100.3 crore year-on-year. Growth in revenue was led mainly by the Sponge Iron and mining business. The company’s power business remained subdued year-on-year.

Lloyds Metals reported earnings per share (EPS) of Rs 3.21 for the quarter that ended in September 2022 as compared to Rs 0.01 for the quarter that ended in September 2021.

Despite the return to operational profitability, the company remains loss-making for the six-month period this financial year. It reported a net loss of Rs 787.62 crore during the first six months of the year. The same period last year had a net profit of Rs 13 lakh.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Hindalco ebbs as high coal cost and low metal rates hurt sentiment

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Hindalco” isinid=”INE038A01020″ bseid=”500440″ nseid=”HINDALCO” sector=”” exchange=”nse”]

Hindalco posted a record quarterly earnings before interest, taxes, depreciation, and amortisation (EBITDA) of Rs 8,640 crore for the April to June 2022 period but for the current quarter, the company is concerned about rising input costs, the Aditya Birla Group firm’s management said on Thursday.

Satish Pai, Managing Director, Hindalco Industries told CNBC-TV18 that low-cost inventory was utilised in the first quarter of the fiscal which brought costs down. However, higher coal costs and lower London Metal Exchange (LME) prices will hit upstream EBITDA in the current quarter (July-September).

“The upstream margins are going to sharply contract in Q2 and that is because the coal costs went up and we started to see the impact more towards the month of May-June. The full impact of the higher coal prices is going to get reflected in Q2,” Pai said.

He added that the average LME in the first quarter of the fiscal was $2,800 per tonne.

“In Q2, it’s running at $2,400 per tonne, so nearly $400 per tonne lower. So you are going to see the upstream aluminium margins contracting in Q2, whereas we expect copper, Novelis and aluminium downstream to do very well in Q2,” Pai said.

Hindalco shares started the session in the green but soon slipped nearly 3 percent from the day’s high. The alumina stock was trading at Rs 433.75, down 1.43 percent from the previous close, at 1:45 pm.

In the quarter ended June 2022, aluminium upstream EBITDA stood at Rs 3,272 crore, up 41 percent from Rs 2,317 crore in the same quarter last fiscal, primarily due to favourable macros, higher volumes, and better operational efficiencies, partially offset by higher input costs, the firm said on Wednesday in a regulatory filing.

Downstream EBITDA/t, meanwhile is likely to move towards $270 per tonne in the July to September 2022 period, against $261 per tonne in the previous quarter, Pai said.

He pointed out that Hindalco’s US subsidiary Novelis has certain uncertainties. Wth interest rates in the US market going up, it will affect the building and construction sector and will lead to auto sales slowdown.

Novelis’ reported a record adjusted EBITDA per tonne of $583, compared to $570 a year earlier. The company’s management had already revised its sustainable EBITDA per tonne guidance to $525 plus from earlier $500 plus.

“We have been cautious when we give that guidance. The potential to surprise always is there, but the macro environment also is a bit cloudy right now, especially in the US and Europe and hence we have been a little bit cautious when we give that 525 guidance,” he said.

Globerage brokerage CLSA has raised its target price on Hindalco’s stock to Rs 525 per share with a buy rating after EBITDA beat estimates.

CLSA expects profitability to recover in the second half of the fiscal as coal costs soften, it said. With 60 percent EBITDA from its conversion business, Hindalco remains well placed, the brokerage said.

Jefferies, meanwhile, has a hold call on the stock, and has raised its target raised to Rs 380 from Rs 310 per share. A 15 percent sequential upside in the Q1 EBITDA is 24 percent above the brokerage’s estimate. EBITDA is led by better-than-expected margin across businesses, it added.

India aluminium EBITDA/t, is coming off from Q4 peak, the brokerage said adding, that it expects a further contraction in India aluminium EBITDA/t. Jefferies has raised FY23-24 EPS estimate by 9-13 percent.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nalco shares gain as Street cheers 66% jump in profit despite margin miss

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of National Aluminium Company (Nalco) jumped on Wednesday, after the state-run company on Monday reported over a 66 percent rise in profit for the April-to-June 2022 quarter, compared to the same period last year.

After trading in red in the initial hours, Nalco shares advanced close to 3 percent intraday and ended the session 1.5 percent higher at Rs 79.90 on the BSE.

Even as the company’s profit for the first quarter of the fiscal jumped 66.8 percent to Rs 578.6 crore, it was 4 percent below Street estimates, as the analysts polled by CNBC-TV18 had projected Rs 603 crore.

On the revenue front, Nalco beat estimates to witness a jump of nearly 53 percent to Rs 3,783.3 crore as against Rs 2,475 crore in the corresponding quarter last year.

Also Read: Hindalco net profit jumps 48% to an all-time high of Rs 4,119 crore — Street gives a thumb up

The company, which has integrated and diversified operations in mining, metal and power, saw its earnings before interest, taxes, depreciation, and amortisation (EBITDA) — a measure of operating profitability — jump by almost 50 percent YoY to Rs 868.7 crore. This, however, is 6 percent below the poll projection of Rs 924 crore.

Nalco’s margin for the quarter under review fell 50 basis points (bps) to 23 percent against the year-ago period. The poll had estimated the margin to come in at 26.1 percent. Factors impacting the company’s performance

The cost of power consumed, which increased 79 percent YoY to Rs 1,337 crore from Rs 749 crore, is one of the factors impacting the company’s performance.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Hindalco net profit jumps 48% to an all-time high of Rs 4,119 crore — Street gives a thumb up

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Hindalco” isinid=”INE038A01020″ bseid=”500440″ nseid=”HINDALCO” sector=”” exchange=”nse”]

Aluminium and copper manufacturing company Hindalco reported its earnings for the April to June 2022 quarter, in which its net profit surged to a record high of Rs 4,119 crore, according to data released by the company.

Hindalco’s consolidated net profit for the quarter under review jumped 48 percent from Rs 2,787 crore in the corresponding quarter last year. Its consolidated revenue rose 40 percent on a year-on-year basis to Rs 58,018 crore against Rs 41,358 crore in the first quarter of the previous fiscal.

After the financial results were announced, Hindalco shares rose more than 5 percent intraday and were trading 4.39 percent higher at Rs 439.95 on BSE at 2:15 pm.

The company also posted an all-time high quarterly consolidated earnings before interest, taxes, depreciation, and amortisation (EBITDA) — a measure of operating profitability — at Rs 8,640 crore, up 27 percent YoY.

According to the company’s statement, the excellent results were driven by better macros, robust performance of aluminium downstream and copper businesses along with better operating efficiencies.

Copper EBITDA stood at a record high of Rs 565 crore, up 116 percent YoY from Rs 261 crore in the same quarter last year. A CNBC-TV18 poll of analysts had projected the copper EBITDA to come in at Rs 333 crore. Copper rod sales, meanwhile, reached an all-time high during the three-month period to 80,000 tonnes, up 73 percent YoY.

Aluminium upstream EBITDA was recorded at Rs 3,272 crore, up 41 percent compared to the same quarter a year ago while EBITDA margin came in at 38 percent. The firm posted aluminium downstream EBITDA at Rs 158 crore, up 305 percent YoY while EBITDA per tonne at $261, up 306 percent YoY, according to the company’s statement.

Commenting on the result, Satish Pai, Managing Director, Hindalco Industries, said the company’s earnings for the June 2022 ended quarter were even stronger than the previous quarter, despite rising input costs and inflationary pressures.

“Our performance was backed by strong operational efficiencies and pre-emptive sourcing of critical raw material, thus ensuring stable operations and higher margins. Our business model supports our position as an integrated aluminium producer with one of the world’s best EBITDA margins,” he said in a statement.

Our product mix enhancement strategy is working well with the Aluminium Downstream EBITDA growing four-fold YoY. Novelis reported its highest ever EBITDA per ton driven by higher product pricing, favourable product mix and higher recycling benefits. Looking ahead, we remain focused on riding all market cycles with our greener, stronger, smarter approach.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Vedanta eyes debt-free status as it woos Street with its best-ever April-June operating performance

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Vedanta” isinid=”INE205A01025″ bseid=”500295″ nseid=”VEDL” sector=”Mining & Minerals” exchange=”nse”]

Vedanta shares jumped on Friday, a day after the mining giant reported its best operating performance in the April-June period, boosted by growth across key segments. The Vedanta stock gained by as much as Rs 10.9 or 4.4 percent to Rs 256.4 apiece on BSE, as the company vowed to be debt-free in the coming years.

Vedanta’s quarterly net profit rose 5.9 percent to Rs 5,593 crore compared with the corresponding period a year ago, led by a 36.1 percent rise in revenue to Rs 38,251 crore, according to a regulatory filing.

Vedanta’s EBITDA — a key metric that determines a business’s short-term operational efficiency — came in at Rs 10,197 crore for the three-month period, up 3.3 percent on year, its highest ever in the first quarter of a financial year.

However, it fell short of the estimate of Rs 10,967 crore by analysts in a CNBC-TV18 poll amid lower-than-expected contribution from aluminium and power segments.

#1QwithCNBCTV18 | Vedanta reported a weak set of Q1 earnings, with numbers lower than street estimates. @Nigel__Dsouza gets the fineprint pic.twitter.com/D60ouOSoVg

— CNBC-TV18 (@CNBCTV18News) July 29, 2022

The company’s EBITDA margin — a key measure of operating profitability —  came down to 25.7 percent in the June quarter from 34.4 percent in the year-ago period.

The EBITDA from the aluminium unit, at Rs 2,251 crore, fell short of the analysts’ estimate of Rs 2,700 crore. The operating performance of oil and international zinc businesses was in line with estimates.

Vedanta Group CEO Sunil Duggal exuded confidence that the company’s debt will come down going forward. “The intention is to become debt free at some point of time, but keeping a debt for a mammoth company like ours is also a healthy sign,” he told CNBC-TV18.

He said the company’s consolidated debt is getting reduced steadily. The company’s debt increased 32.3 percent to Rs 26,799 crore in the April-June period.

“Looking at the full potential of our business and the de-bottlenecking, and other expansion plans in the pipeline, we are looking at revenue of $30-35 billion and EBITDA of 12-13 billion and with that, a healthy cash flow and our commitment of deleveraging at parent by $4 billion in the next three years,” Duggal added.

The company said it remains focused on sustaining and improving its asset quality, a stable performance and creating long-term shareholder value. It also said its dividend payouts are in line with its strong operational outcomes.

ALSO READ: These high dividend-paying stocks can protect your portfolio during bad times

Vedanta remains one of the country’s top dividend paying companies. It announced a payout of Rs 31.5 per share in April, and a 19.5 per share one in July 2022, taking its dividend yield to 15.4 percent so far in 2022.

It said its dividend payouts are in line with its strong operational outcomes, enabled by its efforts to improve productivity and efficiency.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow