The ratings agency Crisil said the operating margins of US steel companies are likely to see a decline in fiscal 21. However, he predicts a better position compared to the recession in FY16.
According to the report, Indian primary steelmakers' operating margins are likely to decline 2-15%, mainly due to weaker volumes and sales. Operating margin fell from 4% in FY2020 to 17%, down from a peak of 21% in FY19. It should be noted that FY16 saw its lowest rate of 9%, during which the sector experienced a significant slowdown.
Crisil anticipates an increase in steel demand for the remainder of the current fiscal year. However, this would not have been enough to cover the sharp decline in demand experienced during the first quarter of the fiscal year. The expected increase in government spending on rural housing and infrastructure, coupled with a revival in the auto industry, is likely to be a key driver of steel demand growth. The report says the pace of the recovery and its impact on steel prices must be closely monitored.
It is feared that domestic producers have deferred at least 50% of their planned capital expenditures during the current financial period. Consequently, companies are likely to report stable gross debt figures.
Profits of metallurgical companies are expected to fall in 21 financial years
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Azovpromstal® 24 July 2020 г. 11:31 |
