The Nifty Metal index was up 9% last week, marking its best weekly return in nearly four years. All index constituents had ended the week with gains.
Jefferies also wrote in its note that the Asian steel spread remains 20% below long-term average and has scope to expand.Indian steel prices are up 5% from the December lows and any safeguard duty can provide further support, boosting margin and valuations, Jefferies said in its note.
The brokerage added that it remains positive on metals and has “buy” ratings on Hindalco and Tata Steel.
Last month, news agency Reuters quoted Janata Dal (Secular) leader and Union Minister for Heavy Industries, HD Kumaraswamy, as saying that a temporary levy of 15% to 25% on Chinese imports is likely within the next six months. In January, Steel Secretary Sandeep Poundrik had said a decision on the safeguard duty was expected in 2-3 weeks.
Of the 30 analysts that have coverage on Hindalco, 27 have a “buy” rating and three have a “sell” rating. A total of 35 analysts have coverage on Tata Steel. Of these, 21 have a “buy” rating, eight have a “hold” rating and six have a “sell” rating. Of the 35 analysts that have coverage on JSW Steel, 19 have “buy” ratings, six have “hold” ratings and 10 have “sell” ratings.
Metal stocks Hindalco, Tata Steel and JSW Steel were trading in the green on Monday, March 10. Tata Steel was up 0.32% at ₹152.05 apiece, JSW Steel was up 1.27% at ₹1,023.95 apiece and Hindalco was up 1.14% at ₹699.25 per share at 12.30 pm.
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