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ICICI Securities Report
Q3 FY23 is likely to witness the juxtaposition of lower realisation and coking coal cost benefits, though subdued volume growth may spoil the fairy tale. Key points:
Ferrous Ebitda is likely to benefit from lower coking coal cost despite realisation declining by Rs 2,000-3,000/tonne;
volume growth may stay subdued with benefits of export duty roll-back likely to be realised only in Q4 FY23;
high thermal coal cost and lower London Metal Exchange prices may constrain the profitability of nonferrous players.
Going ahead, we expect profitability to improve for ferrous players owing to the recent price hikes taken and higher shipments as export volume revives while non-ferrous players are likely to benefit from lower thermal coal cost. That said, we await the management's commentary and guidance on spreads/volume.
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