Top Picks: Edelweiss Recommends These 2 Metal Stocks To Buy | Mint – Mint

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Given the volatility in coking coal prices, brokerage house Edelweiss sees JSPL and Tata Steel better placed as they are relatively insulated from coking coal prices. Further, Tata Steel and JSW Steel also stand to gain the most from higher automotive contract prices, it said. 

Edelweiss has maintained its positive view on the ferrous space with Buy ratings on Jindal Steel and Power or JSPL (target price of 637) and Tata Steel (target price of 1,695) as key stock picks.

“Despite a sharp correction in domestic spot raw material spreads, we stay positive on the ferrous space as: flats steel prices will likely find support in the recent uptick in coking coal prices; automotive contracts are being negotiated at higher prices globally, and uptick in secondary rebar prices is a positive, indicating stable demand from construction sector,” the note stated.

In China, covid related lockdowns continue to weigh on sentiments, despite the stimulus expectations. The brokerage remains positive on the ferrous space with Tata Steel and JSPL as its key metal stock picks given their relative insulation from the steep coking coal costs.

“Taking cues from the export market, HRC prices in traders’ market declined for the second consecutive week. Rebar market fared relatively better with secondary rebar prices regaining momentum through the week. Coking coal prices, on the other hand, resumed its upward trend, narrowing the spreads. FOB prices in the regional market remained range bound,” Edelweiss’ note added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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