Speaking to CNBC-TV18, Jhonsa said India’s steel consumption in March stood at around 12.5 million tonnes, in line with recent trends. “The domestic story is very robust in this entire global uncertainty,” he said.
Jhonsa prefers ferrous metals over non-ferrous, especially companies with strong domestic exposure. His top picks in the ferrous space are JSW Steel and Jindal Steel & Power (JSPL).
Jhonsa also sees strong potential in ancillary raw material suppliers like MOIL and Lloyds Metals and Energy. “My target price for MOIL is around ₹400, and Lloyds is over ₹1,500,” said Jhonsa. MOIL is well-positioned as the largest manganese merchant miner in India, while Lloyds benefits from its MDO (mine developer and operator) business ramp-up.
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Safeguard duties are helping domestic prices remain competitive against imports. Domestic hot rolled coil (HRC) prices are nearly on par with Chinese landed steel prices after considering the expected 12% safeguard duty, he noted.
In the non-ferrous segment, Jhonsa sees Vedanta benefiting the most from falling alumina prices due to its non-integrated model. He prefers Hindalco as a better long-term pick in light of the Novelis growth story and potential tax cuts in the US.
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However, Nalco is less favoured because of its heavy exposure to third-party alumina sales amid softening prices.
For the entire interview, watch the accompanying video
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