Ferrous Sector Set for Strong Q4, Coal India EBITDA to Surge 46%

The report from Emkay Global Financial Services said that "COAL is likely to report strong on-quarter EBITDA growth, among mining stocks, surging over 46 per cent or Rs 115 billion". The growth is supported by higher e‑auction realisations and improved offtake amid rising power demand.

HRC and rebar prices climbed about 14 per cent and 21 per cent respectively on a sequential basis. The uptick was driven by a robust demand environment, accelerated government infrastructure spending, and implementation of safeguard duties toward the end of Q3.

"We assume coverage on the metals pack with a neutral-to-positive stance across ferrous and non-ferrous players," the report said.

It expected Steel Authority of India Limited (SAIL) to lead the gains in Q4, supported by a favourable product mix skewed toward long products. Non-ferrous should see healthy growth on stronger aluminium or silver prices and Indian rupee depreciation, benefiting few private players. Mining and others may remain a mixed bag, the report said.

Coking coal costs rose to an average of $232 per tonne in Q4, up from $199 per tonne in Q3, which will exert modest pressure on EBITDA spreads of ferrous players even as realisations more than offset input inflation.

The report forecasts non‑ferrous sector to deliver healthy sequential earnings growth, aided by roughly 13 per cent higher aluminium prices, a sharp 51 per cent surge in silver, a modest 2 per cent uptick in zinc and around 3 per cent depreciation of the rupee.

Mining and related segments are likely to show divergent performance.

The report said estimated earnings over fiscal 2027-28 for ferrous players to be supported by extended safeguard measures, expected demand growth of about 8 per cent and China's production cuts.

- IANS