MUMBAI: Steel and cement, two capital-intensive sectors that are crucial for building hard infrastructure, are witnessing better sales since October. That could boost margins and growth outlook for the companies in these sectors, which are benefiting from a quicker-than-expected pickup in construction, rural consumption and a visible sales revival in the automotive industry.Analysts expect a 10-20% year-on-year rise in demand in the second half (H2) of FY21, with many pockets of the economy opened up after months of lockdowns.“Almost all of the consuming sectors like auto, pipeline projects, ship-building, vehicles and construction have picked up for us since October. We feel that the demand will continue,” said Jindal Steel and Power (JSPL) managing director VR Sharma.For JSPL, demand has reached pre-Covid levels. The company expects that in Q3 sales will be at least 7-8% higher than the normal consumption levels, and in Q4 it should be at least 10% higher than the previous year.“We can say that Q3 will be one of the best quarters for steel companies in terms of operating profits per tonne in the past three years,” said Jayanta Roy, senior vice president at credit rating company Icra.Pent-up demand in sectors such as automobiles, consumer durables or… Read full this story
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