Aluminium, copper and zinc are the major contributors of the non-ferrous metals mining sector.
"The rating outlook for mining and metal companies remains stable on expectations of stable margins. This is partly because these companies are able to charge a physical premium, given the oligopolistic nature of the metals and mining market in India," the credit rating agency said in a statement.
Moreover, if the Indian rupee continues to remain at the current Rs 62 per 1 USD level, it will likely provide some cushion to the mining firms, India Ratings said but cautioned that margins of larger players can get negatively impacted if the rupee appreciates to 60 per US dollar.
This is because 3.2-3.8 MT capacity, which is more efficient in terms of cost, is likely to come up. The increase in cost-efficient capacity "may prevent the prices (of aluminium) from exceeding USD 1,800 per tonne", it said.
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It added that potentially the global aluminium cost curve may recalibrate marginally downward.
Talking about domestic aluminium companies, India Ratings said that their operating profitability will remain challenged due to cost inflation and lower physical premiums in the next fiscal.
Moreover, key sectors driving aluminium growth, such as construction, power, automobiles and packaging are unlikely to generate robust demand in FY'15, it said.
Talking about Copper, India Ratings said it anticipates a global over-supply risk to persist in the near term and reduced demand from China in 2013 and historically high systemic inventory levels of the metal will keep its price suppressed.
However, an uptick in demand from the US and Europe could support copper price above the current level, it said, adding that Indian companies are likely to benefit from a surplus in concentrates in China and consequent stable treatment charges and refining charges (TCRC) in FY15.