Neutral on Metals & Mining - Expect another weak quarter - Kotak

Metal companies will likely report a weak quarter due to a combination of decline in prices and MTM forex losses on unhedged borrowings. Steel names will be impacted by decline in realizations and higher coke costs.

All the non-ferrous companies will report sequential decline in volumes due to shutdowns. To add, decline in LME prices will lead to 34% sequential decline in operating profits. MTM forex losses will hit JSW Steel the most with the company likely to report net loss.

We remain cautious on the sector; prefer NMDC and Sterlite.

Source : Equity Bulls

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