Q1FY22 Result Preview - Metals & Mining - ICICI Direct

For Q1FY22E, we expect domestic steel companies to report a healthy quarter (in terms of EBITDA/tonne), driven by higher steel prices. For the quarter, on a QoQ basis we expect blended realisation of steel companies to be higher in the range of Rs. 6000-7000/tonne (for our coverage universe), wherein the price increase is higher for flats than longs. Subsequently, on a QoQ basis for our coverage universe, we expect EBITDA/tonne of steel companies to increase in the range of ~Rs. 4000-5000/tonne. For Q1FY22E, EBITDA/tonne of Tata Steel (standalone operations) is expected to come in at Rs. 33000/tonne (Rs. 27775/tonne in Q4FY21, Rs. 5920/tonne in Q1FY21). For Q1FY22E, standalone operations of JSW Steel are likely to post an EBITDA/tonne of Rs. 24000/tonne (Rs. 19756/tonne in Q4FY21, Rs. 5104/tonne in Q1FY21). SAIL's EBITDA/tonne for Q1FY22E is likely to come in at Rs. 18000/tonne (Rs. 14145/tonne in Q4FY21). Even on the non-ferrous front, on a QoQ basis, zinc, lead and aluminium prices are up 6%, 6% and 15%, respectively, while YoY, zinc, lead and aluminium prices are up 48%, 27% and 60%, respectively. The uptick in base metal prices augurs well for the operating margins of non-ferrous players.

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Source : Equity Bulls

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