More gains ahead for steel stocks

JSW, Tata Steel best-placed to gain most from the sector's re-rating

Steel majors Tata Steel, JSW, SAIL and Jindal Steel (JSPL) saw intra-day gains of two-four per cent on the bourses and closed one-two per cent higher on a day when broader indices closed in the red.  

The trigger was a report by CLSA, which indicated the sector could get re-rated.  The confirmation of anti-dumping duties on some steel products, seen as a  positive for domestic players, improving demand outlook and demand-supply tightening with reduction in capacity expansions should help the sector command higher multiples. The government’s implementation of minimum import price (MIP) has also supported domestic steel realisations.  CLSA sees