Nomura has reiterated its 'Buy' ratings on Tata Steel, JSW Steel, Jindal Steel and Power, and Lloyds Metals & Energy, saying India's steel makers are poised for stronger first-quarter earnings even as domestic rebar prices continue to weaken.
The brokerage expects Tata Steel, JSW Steel, Jindal Steel and Power, and Lloyds Metals & Energy to benefit from earlier price hikes and resilient flat steel prices, which should more than offset higher input costs.
In its latest weekly steel tracker, Nomura said domestic hot-rolled coil (HRC) prices remained unchanged at Rs 58,200 per tonne during the week ended July 3, while rebar prices fell Rs 1,250 week-on-week to Rs 49,900 per tonne-their lowest level in six months and the first time below the Rs 50,000 mark this year.
The widening gap between flat and long steel products reflects the "sustained resilience in HRC prices over the rebar prices," the brokerage said.
Despite the correction, India's HRC spot margin stood at around Rs 34,285 per tonne in June, remaining "well above the median margin level observed over the past two years."
Nomura believes the four steel companies are well placed to benefit from price hikes implemented in late Q4FY26 and through Q1FY27, which are "more than sufficient to absorb any cost inflation arising from the West Asia crisis."
"Despite the near-term moderation in realizations, we expect Indian steel majors to report sequential EBITDA per tonne improvement in 1QFY27F, with margins expanding quarter-on-quarter as the lagged benefit of earlier price increases flows through to earnings," the brokerage said.
On raw materials, imported coking coal prices remained broadly stable at $244 per tonne, while global iron ore prices held at around $92 per tonne, close to their lowest levels this year.
Nomura also flagged continued weakness in China's property sector, saying the recovery remains "deeply uneven," with strength confined to select Tier-1 cities while broader demand, property investment and new home sales continue to deteriorate.
Against this backdrop, the brokerage maintained its positive stance on Tata Steel, JSW Steel, Jindal Steel and Power, and Lloyds Metals & Energy, citing resilient domestic flat steel prices, easing raw material costs and an improving earnings outlook.