Steel Majors Post Better than Expected Earnings

Automobile, infrastructure & construction sectors are driving demand for steel

Increase in steel prices benefit companies in the sector

A sharp increase in steel prices, along with by higher realisation, has helped domestic steel majors post better than expected earnings for the quarter ended June 2018. The increase in steel prices has helped improve operating profits as well.

Automobile, construction and infrastructure sectors are driving demand for steel. The construction sector, which is the largest consumer of steel at around 60%, is picking up with the government’s continuous push towards infrastructure and housing spending. Various projects like the metro, Bharatmala, Navi Mumbai airport, coastal roads etc. are expected to drive demand for steel products in the near future.

Read more about the segments that are driving demand for steel on Making smalltalk.

You can invest in the growth in this sector by buying the smallcase Metal Tracker.

Government spending on infrastructure on the rise

In the run up to the 2019 Lok Sabha Elections, the Central Government has been augmenting its public investment spree. During the April — July period, the government has spent Rs 1.11 trillion towards capital expenditure. This is 37% of the full-year budgeted estimate of Rs 3 trillion. Most of the spending has been directed towards roads & highways, railways & power according to government officials. This is the first time that capital spending has crossed Rs 1 trillion for the first four months of any fiscal year.

A Macquaire India Infra and Real Estate official has said that the company has invested half a billion dollars in the Indian infrastructure space. Read more here.

You can benefit from this trend by investing in the smallcase Infra Tracker.

Rebalance update

All Smart Beta smallcases have been rebalanced as of Friday close. Read more on how you can earn market-beating returns with these smallcases without taking extra risks.