Metals & Mining – Jul-Sep’26 Earnings Preview – Volumes hold, Costs bite
Published on 08 Oct 2026
We expect our metals coverage universe to deliver relatively steady operating performance in Q2FY27, with revenue/EBITDA/PAT growth of 18%/23%/24% YoY (+2%/-7%/-8% QoQ). Domestic HRC steel prices remained largely flat through Jul- Aug’26 from the Q1 exit level, before firming up and reaching to ~INR64k/t by end-September due to raw material push mainly coking coal. Coking coal surged to USD285/t in one month from August lows of USD213/t on tight supply and export bottlenecks in Australia coincided with curbed supply from Shanxi (mines safety checks post-accident), strong demand from Chindia and higher freight rates. Domestic steel consumption grew 7.5% YoY in H1FY27, while Sep’26 consumption was up 8% YoY. Despite the improvement in steel prices, higher coking coal costs and lower rebar prices are likely to keep pressure on NSR and margins in Q2. We expect steel universe NSR to decline by ~INR1k/t and EBITDA/t by ~INR2k/t. Volumes should remain strong, led by 23%/12%/8%+ growth for JINDALST/JSTL/TATA. Average HRC spot spreads improved 3% QoQ to ~INR27k/t. Top picks: USM, JINDALST, JDSL and HNDL.
