ICICI Securities: Metals Sector - Spectacular Rally Worsens Risk Reward
A worker works while sparks fly as molten steel is poured from a ladle at an arc furnace in the steel melting shop of the Jindal Steel & Power Ltd. plant in Raigarh, Chhattisgargh. (Photographer: Udit Kulshrestha/Bloomberg)

ICICI Securities: Metals Sector - Spectacular Rally Worsens Risk Reward

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Metal Sector has seen a remarkable rally since the Covid-19 induced correction, witnessing average recovery of approximately 60-200%, all in four months.

What was re-experienced though is the resilience of asset valuation framework (notably price to book) in calling out sector bottom.

Most stocks bottomed out between 0.35-0.45 times P/B (barring the cash-rich miners like NMDC Ltd. and Hindustan Zinc Ltd.).

Chinese demand led the recovery, amidst familiar signs of disbelief from market participants. Characteristic signs of catching up are visible across sector names.

Click on the attachment to read the full report:

ICICI Securities Metals Sector Update.pdf

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