FY21 operating margins of Indian steelmakers to fall 200 bps to 15%: Crisil

Companies better placed to ride out slowdown now, than in previous downturn of 2016

Operating margins of domestic primary steel producers are set to decline by 200 basis points (bps) to 15 per cent this fiscal, on weaker sales volumes and realisation, and limited cushion available from lower raw material costs.

That said, producers might still be better off than in the previous downturn of fiscal 2016 because the imposition of antidumping duty by the government and resolution of stressed assets have helped shore up their debt metrics.

Deferral of capex this fiscal and likely demand recovery next fiscal will also support credit profiles, said Crisil in its report today.

The percentage fall in sales volume year-on-year