Top picks: ICICI Securities recommends these metals and mining stocks to buy

Top picks: ICICI Securities recommends these metals and mining stocks to buy

Market


The brokerage firm ICICI Securities is bullish on the metals & mining sector, as the HRC price in the traders’ market rose for the first time since Sep’22 by an average of Rs500/te to Rs54,600/te tracking positive global trends. The research analysts of the broking firm have assigned buy call ratings on the shares of Jindal Steel, SMEL and APL Apollo.

“HRC prices in traders’ market during the week ended 21st Dec’22 rose by Rs500/te on average led by higher prices in global markets. Far East HRC price rose further by US$60/te, scaling US$600/te for the first time since Aug’22. As a result, Indian HRC FOB price also rose 6.5% WoW to US$597/te. Rebar prices remained stable in domestic market with HRC-Rebar discount expanding to Rs1,650/te,” said the research analysts of ICICI Securities.

They claimed that “Going ahead, we expect cost push, higher coking coal and iron ore prices, on the back of optimism around stimulus measures in China to aid global steel prices. As a result, we might see domestic steel producers also taking price hikes for Jan’23. That said, we still await demand pick up in domestic market. Besides, we see fresh round of covid cases in China as key risk. We retain our cautious outlook on ferrous sector with JSPL (TP: Rs605) and Shyam Metalics (TP: Rs425) as our key picks owing to their longs-heavy product portfolios, which are faring relatively better than peers. We are also positive on APL Apollo (TP: Rs1,225) as being a downstream player, it is relatively insulated from adverse price movements.”

“While the recent price hikes in global markets appear encouraging, we feel it is too early to call it a cyclical upturn as 1) covid cases have risen dramatically in China; 2) consumption is likely to trend lower owing to destocking in Europe and advent of seasonally weak winter period in China; and 3) import influx in domestic market might keep price uptick capped. We maintain our cautious view on ferrous space with JSPL (TP: Rs605) and Shyam Metalics (TP: Rs425) as our key picks owing to their long-heavy product portfolios,” they further added in their research note.

The shares of Jindal Steel closed on Friday at 526.95 apiece on the NSE, down by 2.39% from the previous close of 539.85. The stock had touched a 52-week-high of 577.80 on (11-April-2022) and a 52-week-low of 304.20 on (22-June-2022). The shares of Shyam Metalics and Energy Ltd (SMEL) closed on Friday at 286.80 apiece on the NSE, down by 2.12% from the previous close of 293.00. The stock had touched a 52-week-high of 385.50 on (24-March-2022) and a 52-week-low of 273.10 on (20-June-2022). The shares of APL Apollo Tubes closed on Friday at 1,045 apiece on the NSE, down by 1.58% from the previous close of 1,061.75. The stock had touched a 52-week-high of 1,193.00 on (05-December-2022) and a 52-week-low of 770.90 on (24-February-2022).

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.


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