Alpha Ideas 20-20: Why SAIL Is The Best Bet In Steel Sector? Chetan Phalke Explains
Galvanized coiled steel sit in a storage area following manufacture at the Tata Steel Ijmuiden BV plant, a unit of Tata Steel Ltd., in Ijmuiden, Netherlands.(Photographer: Jasper Juinen/Bloomberg)

Alpha Ideas 20-20: Why SAIL Is The Best Bet In Steel Sector? Chetan Phalke Explains

Steel Authority of India Ltd. is likely to benefit from the government’s spending on infrastructure. That’s according to Chetan Phalke, founder and research head at Alpha Invesco, who said “60 percent of steel demand comes from infrastructure.”

The state-run steelmaker has just completed its modernisation plan and expanded its capacity from 12 million tonnes per annum to 21 mtpa. This is in line with the government’s plan to increase the industry’s capacity to 300 mtpa by financial year 2030, the company had earlier told BloombergQuint.

Capacity utilisation is also expected to improve from 76 percent in the last fiscal to 87 percent by financial year through 2023, according to a report by Goldman Sachs.

“Now, none of the top five steel players have the balance sheet to announce new capex,” Phalke said at Alpha Ideas 20-20 event in Mumbai. Therefore, any company, according to him, which is sitting on a large underutilised capacity is going to make money.

Watch Chetan Phalkes Presentation Here:

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