Metal Sector to Post Strong Earnings in Q4 FY21

SEATTLE (Scrap Monster): According to leading brokerage firms, the metal sector earnings are likely to witness big boost in Q4 FY21, mainly driven by recovery in economy and the government’s push to infrastructure projects. It must be noted that the sector had reported strong earnings in the third quarter as well.

In its latest report, Edelweiss Securities said that Q4FY21 is likely to be robust surpassing the record Q3FY21. The ferrous companies will continue to remain as the key driver. The brokerage foresees average EBITDA growth of 156% over the previous year quarter, boosted by minimal cost pressures.

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The production ramp-up across key divisions coupled with favourable commodity prices make Vedanta the top pick among non-ferrous companies. Higher LME prices and benign cost would result in good earnings growth for non-ferrous companies in general. Among mining companies, NMDC is likely to outperform, whereas Coal India is feared to lag behind, said Edelweiss.

Meantime, Kotak Securities expects steel realization for ferrous companies to surge higher by 14% over the sequential quarter. For non-ferrous companies, it expects strong earnings during the quarter, led by notable rise in most commodity prices.