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Tata Steel top pick in sector; positive on JSPL, SAIL, JSW Steel: Edelweiss Securities

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In CNBC-TV18’s special segment, Quarter Se Quarter Tak, Amit Dixit, Director, Institutional Equities at Edelweiss Securities, discussed his perspective on earnings expectations from the steel sector for Q2FY22. He  is optimistic on Tata Steel, it is his preferred pick in the sector, followed by Jindal Steel and Power Ltd (JSPL), Steel Authority of India Ltd (SAIL) and JSW Steel.

In CNBC-TV18’s special segment, Quarter Se Quarter Tak, Amit Dixit, Director, Institutional Equities at Edelweiss Securities, discussed his perspective on earnings expectations from steel sector for Q2FY22.
Dixit is optimistic on Tata Steel. “Tata Steel is our preferred pick in the space, followed by Jindal Steel and Power Ltd (JSPL), Steel Authority of India Ltd (SAIL) and JSW Steel. This is our pecking order,” he said.
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He prefers Tata Steel because he believes that the European business is going to perform very well after a long time.
“We expect the EBITDA per tonne of European division to be around USD 238 compared to USD 90 last quarter. That would provide the fillip to Tata Steel numbers,” he said.
According to him, this quarter, the earnings momentum that one has been accustomed to seeing over the last three quarters would slow down a bit, mainly because of prices flattening out in long segment and there would be cost headwinds also, particularly in case of coking coal.
“So, you could see coking coal cost higher by almost USD 25-50 depending on the company,” he said.
Going ahead into Q3FY22, he expects coking coal cost for all companies to be up by USD 100-125.
For the full interview, watch the accompanying video.
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