Metal Sector; Should Hold or avoid?

metal sector

Whereas market is still suffering from sell-off pressure coming from global markets, few sectors have seen some good buying in last few days. Metal sector is one of them where a good stability is helping steel stocks to recover faster than others after recent selling pressure.

In this Results season, Tata Steel, JSW steel both have recently reported a good growth in Revenue and Profit number for quarter ended on December 2017. Whereas, Top line growth was exiting to see in tata steel, Bottom line growth was awesome in case of JSW Steel. However, as the profit is the major source for improving Cash flow, Results of JSW steel would be considered as a better one over tata steel.

Hold Tata Steel for Rs 1000

In my old one post, I have already added Tata steel as a good option to buy from large caps. You can it here Buy Tata for Long-term.At present levels, risk is much lower in stock because of improved fundamentals and has potential to go up to Rs 1000 in next 6–8 months. Because of current lower margins, great improvement possibility in margins is there which will directly affect the profit number and stock price of the company.

 

JSW Steel, a good bet for short-term?

Before results of JSW Steel, it was looking quite fairly valued to me in market. But after reported Q3 financial statements, company has clearly shown its inside potential and capacity. Currently, stock is trading around Rs 310 which is its 52 week level.

Despite of recent selling pressure in markets and metal sector, JSW is still around its highs which shows how much strong it is getting before any recovery in market. Fundamentals of company are also getting stronger quarter by quarter. Also, condition of overall Metal sector is getting improved indicated by Tata steel, SAIL results. Overall, in higher side, I believe JSW stock has potential upside close to around Rs 345. Meanwhile, I think this level could be seen in stock in next 2-3 weeks if market remain stable or positive for next few weeks.

Recent results reported by SAIL was also exiting to see. Company earned a profit in Quarter ended on December 2017 as compare to net losses in previous quarter. The profit number is not much bigger but is better than earlier quarters. Although, for SAIL, I think Rs 100 is a good level for stock to settle around. But yes, any further improvement in next quarters will have a positive impact on SAIL Stock.



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One thought on “Metal Sector; Should Hold or avoid?

  • October 5, 2018 at 8:35 pm
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    Oh my goodness! Awesome article dude! Thanks, However I am experiencing problems with your RSS.
    I don’t know why I am unable to join it. Is there anyone else having identical RSS problems?
    Anyone that knows the solution will you kindly respond?
    Thanks!!

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