Global Materials | Industrials | Commodities

Rahul Jain

Commodities

<ul>
<li>Steel prices declined for 5 straight weeks; long products like rebar and wire rod saw the steepest fall amid weak spot market sentiment.</li>
<li>Companies expect higher Q1 FY26 realizations, but spot trends remain weak, highlighting a lag between optimism and transactional reality.</li>
<li>Auto and housing demand is softening; only two-wheelers, EVs, and commercial real estate offer near-term support to steel consumption.</li>
</ul>


Steel prices declined for 5 straight weeks; long products like rebar and wire rod saw the steepest fall amid weak spot market sentiment.
Companies expect higher Q1 FY26 realizations, but spot trends remain weak, highlighting a lag between optimism and transactional reality.
Auto and housing demand is softening; only two-wheelers, EVs, and commercial real estate offer near-term support to steel consumption.


India Steel Monitor – May 2025: Prices Fall, Demand Weak, Outlook Diverges

Equity Bottom-Up

Shyam Metalics and Energy / Equity Bottom-Up

<ul>
<li>Shyam Metalics reported robust FY25 results with 15% revenue growth and 21% EBITDA rise, driven by higher volumes and a shift toward value-added products.</li>
<li>The company is executing a ₹10,025 Cr capex plan to double capacity by FY27, targeting high-margin segments like stainless steel and aluminium foil with backward integration.</li>
<li>With zero net debt, strong cash flows, and a forward P/E of ~14×, Shyam Metalics offers a rare blend of growth, capital discipline, and low leverage in the steel sector.</li>
</ul>


Shyam Metalics reported robust FY25 results with 15% revenue growth and 21% EBITDA rise, driven by higher volumes and a shift toward value-added products.
The company is executing a ₹10,025 Cr capex plan to double capacity by FY27, targeting high-margin segments like stainless steel and aluminium foil with backward integration.
With zero net debt, strong cash flows, and a forward P/E of ~14×, Shyam Metalics offers a rare blend of growth, capital discipline, and low leverage in the steel sector.


Shyam Metalics & Energy Ltd (NSE: SHYAMMETL) – A Capital-Efficient Growth Play in Indian Metals

<ul>
<li>Tata Steel reported resilient India performance in Q4 FY25 with strong volumes, though consolidated margins remained under pressure due to ongoing European losses.</li>
<li>The Kalinganagar CRM line and Ludhiana EAF are progressing toward completion. The company’s $2.5 billion infusion into its overseas arm marks a strategic pivot, potentially weighing on returns.</li>
<li>We apply a lower EV/EBITDA multiple of 6x (vs. 7.5x earlier) to reflect the weaker capital allocation stance, flattish steel price outlook, and relatively subdued growth versus peers. </li>
</ul>


Tata Steel reported resilient India performance in Q4 FY25 with strong volumes, though consolidated margins remained under pressure due to ongoing European losses.
The Kalinganagar CRM line and Ludhiana EAF are progressing toward completion. The company’s $2.5 billion infusion into its overseas arm marks a strategic pivot, potentially weighing on returns.
We apply a lower EV/EBITDA multiple of 6x (vs. 7.5x earlier) to reflect the weaker capital allocation stance, flattish steel price outlook, and relatively subdued growth versus peers. 


Tata Steel: Strategic Pivot in Capital Allocation

Thematic (Sector/Industry)

<ul>
<li>U.S. tariff surprises triggered a sharp correction in global commodity prices and Indian metal stocks.</li>
<li>Despite limited U.S. exposure, Indian metal producers were hit hard—despite strong domestic demand and top-tier cost positioning.</li>
<li>Valuation reset appears overdone; further dips offer a compelling entry point. Vedanta, JSW Steel, Jindal Steel and Power and NMDC are best bets in our view. </li>
</ul>


U.S. tariff surprises triggered a sharp correction in global commodity prices and Indian metal stocks.
Despite limited U.S. exposure, Indian metal producers were hit hard—despite strong domestic demand and top-tier cost positioning.
Valuation reset appears overdone; further dips offer a compelling entry point. Vedanta, JSW Steel, Jindal Steel and Power and NMDC are best bets in our view. 


Tariff Shock Creates Overreaction: Indian Metal Stocks Poised for a Tactical Rebound

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

Beat the Street

Beat The Street was founded by Nimish Maheshwari and Sudarshan Bhandari, both of whom are Chartered Accountants by Profession, known for their expert analysis in the fields of Business, Sectoral analysis, and Corporate governance.

With a strong social media presence of 45,000+ Subscribers across various platforms, they are considered trusted voices in the industry. Their insights and analysis have been featured in some of India’s most prominent publications, including the Economic Times, Dalal Street Investment Journal, The Morning Context, and The Ken.

Their analysis on Bankrupt & Insolvent companies has been instrumental in saving investors from significant losses. They have a keen eye for identifying red flags and has identified exclusive redflags earlier in Vedanta, Nykaa, Dhani Services, Adani and many more.

Read Business Not Stock Prices

<ul>
<li>Steelmakers are set for strong Q4 growth, with rising HRC prices and falling raw material costs boosting operating margins by INR 1,200-1,800 per tonne for steelmakers.</li>
<li>Lower input costs, particularly coking coal along with GOI's ADD will significantly improve profitability for steelmakers.</li>
<li>
<a href="https://www.smartkarma.com/entities/jsw-steel-ltd" target="_blank" data-smartkarma-citation="entities:18561:1" rel="noopener">JSW Steel Ltd (JSTL IN)</a> , <a href="https://www.smartkarma.com/entities/jindal-steel-power-ltd" target="_blank" data-smartkarma-citation="entities:6614:1" rel="noopener">Jindal Steel &amp; Power (JSP IN)</a> , <a href="https://www.smartkarma.com/entities/tata-steel-ltd" target="_blank" data-smartkarma-citation="entities:20934:1" rel="noopener">Tata Steel Ltd (TATA IN), </a> <a href="https://www.smartkarma.com/entities/steel-authority-of-india" target="_blank" data-smartkarma-citation="entities:14323:1" rel="noopener">Steel Authority of India (SAIL IN)  expects surge in PAT upto 700%.</a>
</li>
</ul>


Steelmakers are set for strong Q4 growth, with rising HRC prices and falling raw material costs boosting operating margins by INR 1,200-1,800 per tonne for steelmakers.
Lower input costs, particularly coking coal along with GOI's ADD will significantly improve profitability for steelmakers.

JSW Steel Ltd (JSTL IN) , Jindal Steel &amp; Power (JSP IN) , Tata Steel Ltd (TATA IN),  Steel Authority of India (SAIL IN)  expects surge in PAT upto 700%.



Themes of India: Revival of Indian Steel Industry Cycle In Q4 Feasible?

India

Jindal Steel Limited manufactures steel products. The Company offers steel rails, parallel flange beams and columns, angles and channels, plates, and coils, as well as engages in the power, mining, manufacturing, and infrastructure construction businesses. Jindal Steel serves customers worldwide.

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Jindal Steel (JINDALST IN)

India Steel Monitor – May 2025: Prices Fall, Demand Weak, Outlook Diverges

Steel prices have dropped for 5 weeks, with long products like rebar hit hardest; companies optimistic for Q1 FY26 but facing weak spot market...

Rahul Jain

Shyam Metalics & Energy Ltd (NSE: SHYAMMETL) – A Capital-Efficient Growth Play in Indian Metals

Shyam Metalics posts strong FY25 results, plans to double capacity by FY27 with focus on high-margin segments, showcasing growth potential and...

Rahul Jain

Tata Steel: Strategic Pivot in Capital Allocation

Tata Steel's strong India performance in Q4 FY25 overshadowed by ongoing European losses, with strategic pivot and lower EV/EBITDA multiple...

Rahul Jain

Tariff Shock Creates Overreaction: Indian Metal Stocks Poised for a Tactical Rebound

The breakthrough in US-China trade talks removes a major overhang on global trade and is a near-term positive for metals, as it reduces tariff...

Rahul Jain

Themes of India: Revival of Indian Steel Industry Cycle In Q4 Feasible?

Steelmakers in India are poised for strong Q4 growth, with rising HRC prices and falling RM costs boosting OPM by INR 1,200-1,800/ tonne, leading...

Nimish Maheshwari

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

India Steel Monitor – May 2025: Prices Fall, Demand Weak, Outlook Diverges

​Steel prices have dropped for 5 weeks, with long products like rebar hit hardest; companies optimistic for Q1 FY26 but facing weak spot market...

Rahul Jain

Shyam Metalics & Energy Ltd (NSE: SHYAMMETL) – A Capital-Efficient Growth Play in Indian Metals

​Shyam Metalics posts strong FY25 results, plans to double capacity by FY27 with focus on high-margin segments, showcasing growth potential and...

Rahul Jain

Tata Steel: Strategic Pivot in Capital Allocation

​Tata Steel's strong India performance in Q4 FY25 overshadowed by ongoing European losses, with strategic pivot and lower EV/EBITDA multiple...

Rahul Jain

Tariff Shock Creates Overreaction: Indian Metal Stocks Poised for a Tactical Rebound

The breakthrough in US-China trade talks removes a major overhang on global trade and is a near-term positive for metals, as it reduces tariff...

Rahul Jain

Themes of India: Revival of Indian Steel Industry Cycle In Q4 Feasible?

​Steelmakers in India are poised for strong Q4 growth, with rising HRC prices and falling RM costs boosting OPM by INR 1,200-1,800/ tonne, leading...

Nimish Maheshwari

Steel prices have dropped for 5 weeks, with long products like rebar hit hardest; companies optimistic for Q1 FY26 but facing weak spot market...

Shyam Metalics posts strong FY25 results, plans to double capacity by FY27 with focus on high-margin segments, showcasing growth potential and...

Tata Steel's strong India performance in Q4 FY25 overshadowed by ongoing European losses, with strategic pivot and lower EV/EBITDA multiple...

Steelmakers in India are poised for strong Q4 growth, with rising HRC prices and falling RM costs boosting OPM by INR 1,200-1,800/ tonne, leading...