The metal industry is expected to see flat YoY revenue growth in Q1FY26, while PAT is expected to grow by over 20 percent in the quarter. A Prabhudas Lilladher Capital report says that the overall metal sector is expected to clock 9 percent EBITDA growth and 22 percent PAT growth in Q1.
The report suggests that the revenue growth of the metal industry was impacted by the low demand due to maintenance shutdowns, heatwaves and early monsoon. However, the higher domestic steel prices, aided by safeguard duties, and the lower coking coal price have helped the margins of the companies, resulting in higher EBITDA and PAT.
Steel sector performance in Q1
In April, the Indian government imposed a 12 percent safeguard duty on steel products to protect the domestic steel industry against cheap Chinese steel, leading to an increase in domestic steel prices. As per an Axis Securities report, the prices of Hot Rolled Coil (HRC) increased by 9 percent in Q1FY26, leading to higher margins for companies like Tata Steel and SAIL; however, the volume and revenue concerns for both companies persist.
As per the Axis Securities report, Tata Steel’s revenue in the quarter is expected to remain flat on a YoY basis. Moreover, its revenue is expected to decline by 3 percent on a quarterly basis. The company’s EBITDA is expected to improve by 3 percent YoY and 6 percent QoQ.
Similarly, as per Axis Securities estimates, SAIL is expected to see an 11 percent QoQ decline in its revenue. SAIL’s quarterly revenue is partially offset by a 15 percent QoQ reduction in sales of the company.
Jindal Stainless is expected to outperform its peer in Q1FY26. According to the PL Capital report, the company will see a 9 percent volume growth in the quarter with a 2 percent QoQ improvement in realisation. The company stands to have a better pricing power over its competitors, leading to an estimated 32 percent QoQ Ebitda growth.
Non-steel sector
According to Axis Securities report, in the non-steel sector, primarily aluminium companies could see contracted margins in the quarter due to the decline in aluminium prices. Furthermore, due to the high base of Q4FY25 the sales are expected to normalise in Q1FY26.
Hindalco is expected to see a 5 percent QoQ decline in its revenue due to lower sales realisation. The company is expected to have an 11 percent YoY and 30 percent QoQ decline in EBITDA
