ICRA on Monday revised its outlook growth target for domestic steel demand to 9-10% for the current fiscal on healthy government spending and demand from steel-consuming sectors. The domestic steel consumption registered a growth of 11.3% between February to April 2024, the agency said in a report.
It further said that government capex spending was also healthy until February 2024, and other steel-consuming sectors like housing and real estate contributed to the resilient demand thereafter.
"Given these leading trends, the rating agency has revised its FY25 steel demand growth target to 9-10%...compared to the earlier estimate of 7-8%, leading to the sector's FY2025 earnings being revised upwards,' the report said.
Girishkumar Kadam, Senior Vice-President & Group Head, Corporate Sector Ratings, ICRA, said for the last three years, the steel industry has witnessed its fastest period of growth since the global financial crisis.
He further said that India's finished steel imports increased 38.2% in FY2024 and the country remained a net importer of the commodity.
"India turned into a net steel importer last fiscal after a gap of five years. Given the weak global growth outlook over the next few quarters, we expect domestic steel imports to rise further by 13-14% in FY2025, leading to the country being a net steel importer in the current fiscal as well," he said.
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