Investors are looking beyond Q4 FY25, as tariffs take the limelight. ICICI Securities believe, companies with business models focused on the local market – Shyam Metalics, APL Apollo and JSW Steel – should fare better. While its medium-term view on non-ferrous is positive, the stocks may relatively fall short – owing to their higher linkage to the global trade and LME prices.
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ICICI Securities Report
For Q4 FY25, we believe that four stocks are likely to be in focus with better earnings growth compared to peers on margin revival. Key points:
APL Apollo – Ebitda/tonne likely to spring back to Rs 4,700 (up 14% YoY/13% QoQ) and Ebitda likely to exceed Rs 4 billion.
Shyam Metalics – Ebitda likely to cross Rs 5 billion, its highest since Q1 FY23, on the back of better product mix and lower cost. Ebitda margin likely to expand 40 bps QoQ.
Hindalco – sales volume likely to be flat YoY, but grow 5.3% QoQ. Novelis' Ebitda/tonne likely to exceed $490 on the back of better scrap spread, higher recycling and beverage can volumes growth.
Gravita India – Ebitda (including hedging gains) likely to exceed Rs 1.05 billion with steady volume growth in Pb and better profitability in Al and plastics divisions.
Besides, TSN is likely to show profit at the Ebitda level again (after loss in Q3 FY25) despite challenging market conditions. We expect Jindal Stainless' standalone Ebitda to slip owing to lower exports, higher freight expenses and one-off costs in Q4 FY25.
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