I would personally stay out of Steel manufacturing sector because it is my observation that:
Demand for steel is slowing down domestically.
Since elections are approaching it is normal for infra projects to slow down.
Due to sanctions imposed by Mr Trump there is lot of steel from China, Russia, South Korea etc aggressively looking for new markets.
Indian government is also protecting domestic steel manufacturers by imposing extra import duty but on the contrary it has become very chanllenging for Indian steel manufacturers to export steel to other countries because of counter-duties being imposed by them.
All these factors will contribute in correction of steel prices and in turn be boon for the end customer.
Disclosure: Our group is using around 12000 MT steel every month sourced through various steel manufacturers.
South-west monsoon made good progress in KA, TN. All the southern state dams are at fullest capacity. Paddy, sugar cane, cotton, rubber, coffee will witness a rise in production (unless there’s no floods in north-east monsoon). Positive for fertilizers, textile and rubber + agri automobile; negative for sugar, rice, coffee cos. Sugar sector woes will be prolonged.
Found good blogs to track latest developments in ferrochrome industry in China and all over the world. I found it very helpful to understand basics behind price change of iron ore.
Hope you would love it.
It matter in all investment - cyclicals, secular, special sits etc.
For cyclical e.g if balance sheet is not good than even a good management can’t take much advantage e.g. Tata steel
If managment is not good then cyclical may not see good return e.g. KMB and his focus on growth instead of quality of earning in aluminium etc.
Is anyone tracking ferroalloys.promoter holding is good.balancsheet is also good.stock at all time low.pe of 1 price to book of .30 .price to sales0.20.is there any problem related to management?or cyclical low price?
Some developments on my side. Our firm is now a SEBI-Registered Investment Advisory firm. Will be constrained on talking of any buy/sell/hold on any stocks. Will try to contribute (time permitting) on sectors, and to an extent on companies, without giving any advice.
Sir, being an expert in cyclical commodity stocks i have a doubt to ask you.
In my childhood days we used to buy unbranded salt, but now we are buying branded one. ie now salt has been become an FMCG item rather than a commodity. But still we are buying unbranded sugar. Recently when I went to the local supermaket owned by my cousin, I found one rack fully loaded with branded sugar. I enquired about it with him and he said that there is a very good responce for it. Our town is a small C class town in Kerala which consists of 99.9% middle and lower middle class people. (I am not specifying the brand as you have started advisory firm and it will be difficult for you to comment on a particular stock.) I feel a shift is happening in the behavior of consumers. I cant understand that if we are ready to buy branded salt, why should we not buying branded sugar.(Not forgetting that branded salt got the biggest push from the iodized salt drive for the fight against goiter from various health organizations and the govt
So I feel if there is going to be a change in customer preference from unbranded sugar to branded one, the sugar sector will become an FMCG segment rather than a commodity one and market may assign FMCG valuations for the sector rather than a commodity valuation
Pls share your views. Thanks in advance
Hindustan Copper (HCL), the country’s only integrated copper producer, on Thursday said it will utilise funds from issue of fresh equity shares to expand mine capacity nearly six times. This will be part of the company’s plan to spend ₹5,500 crore over the next six years on expansion.
A day earlier, the Cabinet had given its approval for issue of fresh equity shares amounting to 15% of equity capital in HCL, which is tipped to raise ₹900-1,000 crore through qualified institutional placement (QIP). In the absence of budgetary support for the expansion plan, the fund raising plans, which will be a mix of equity, internal accruals and debt, are critical for HCL to achieve its production target of about 190,000 tonnes of metal-in-concentrate. Internal accruals are likely to be about ₹300-500 crore per year within the span of six years.
The company said capital expenditure plan for mine expansion along with a further investment of ₹175 crore on exploration activities spread over three years will increase availability of copper and enable HCL to meet 30% of the country’s demand for copper, up from 4% now.
This will also help reduce the country’s dependence on imports to the extent of 25% of copper mineral.
