Global uncertainty may cloud steel outlook: Aditya Welekar

«Now the valuations are not very attractive at this point of time because all these positive news, the hike which the steel mills have taken are in the price,» says Aditya Welekar, Axis Securities.

Given that the industry was rallying for 25%, but expectation was about, 10 to 15 is going to actually come in in terms of safeguard duty. Tell me, how does this really move the needle, if at all, for the steel industry?
Aditya Welekar: So, I guess you summarised it, so the expectation was quite higher, 20% to 25%, and the outcome of 12% is slightly below that. And part of it, which I want to highlight, is that in the first week of March, those steel mills have already taken price hikes in the tune of Rs 1000 to Rs 1500 for the flat HRC, that is hot rolled coils and cold rolled coils. So, with that backdrop, the stocks have already anticipated that such a move should come and the share prices have reflected that partly.

With this investigation and the kind of imports which have got restricted in the month of February, so if you see the imports have reduced cumulatively in the month of Jan and Feb to the tune of 40%, so all these factors were indicating that the bottom for the steel names, the valuations were also not very demanding at that point of time.
But now with the rally, if you can see that the share prices have rallied since last one month and with that, the valuation gap which had emerged earlier, is part of it is closed I will say.
So, now the valuations are not very attractive at this point of time because