Domestic steel players poised for strong deleveraging plans as prices surge

With profitability at record levels, even if steel prices correct by 15-20% going ahead, players would still be in a comfortable position to deleverage, says an analyst

With domestic steel prices heading north, a balance between capex and deleveraging of the balance sheet would augur well for the primary steel producers, said analysts.

“Profitability of domestic steel companies is at record levels. Even if steel prices have to correct by 15-20 percent going ahead, players would still be in a comfortable position to deleverage,” Priyesh Ruparelia, vice president, Co-group head, corporate ratings ICRA Ltd said.

Domestic hot-rolled coil prices have jumped almost 80 per cent in the last one year to be at about Rs 66,000 per tonne.

Meanwhile, Tata Steel, in its Q4 FY21 earnings conference