ICRA said that the domestic steel consumption between February and April 2024 registered a growth of 11.3%. While government capex spending was healthy until February 2024, other steel-consuming sectors like housing/real estate contributed to the resilient demand after that, it said.
(Photo: IANS)
For the Financial Year 2025, credit rating agency ICRA has revised its full-year steel demand growth target to 9-10%.
This is 200 basis points higher than the earlier estimate of 7-8%.
ICRA said that the domestic steel consumption between February and April 2024 registered a growth of 11.3%. While government capex spending was healthy until February 2024, other steel-consuming sectors like housing/real estate contributed to the resilient demand after that, it said.
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The industry’s leverage, total debt to operating profits, was expected to remain at a comfortable level of 2.0-2.5 times in FY2025, on the back of better realisations and higher deliveries. It would make the Indian steel industry resilient to withstand a worsening global demand environment.
However, a sub-par economic growth outlook in China along with other leading global steel-producing and consuming hubs have redirected steel trade flows to high-growth markets like India, ICRA noted.
Senior vice-president and group head, corporate sector ratings, ICRA, Girishkumar Kadam, said that for the last three years, the steel industry has been going through the fastest period of growth witnessed since the global financial crisis.
“In FY2024, the industry registered a consumption growth of 13.6%, which is marginally lower than the peak of 13.9% registered in FY2006 during the golden period of India’s private sector capex,” he said.
According to the latest data from the Ministry of Commerce & Industry, steel production increased by 7.1% in April 2024 with cumulative index increased by 12.4% during 2023-24.
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