Steel Authority of India Ltd has produced 16.3 million tonnes of crude steel in the current financial year showing an increase of 8% over the last year. It was the company’s best ever saleable steel output during the year.
SAIL has marked highest ever total steel despatches at 14.86 million tonnes during FY’19 due to recently created dedicated logistics set-up by SAIL.
Almost all the major segments of the company like Hot Metal, Crude Steel, Saleable Steel and Sales have reported a growth of 10%, 8%, 14% and 13% respectively.
During the year 2018-19, SAIL had the highest ever production of 985,000 tonnes of higher grade Rails.
The increased demand from infrastructure and construction segments led to rise in domestic steel consumption. Thus, the challenge for next year is much higher with a plan of 21% increase in both production and sales of crude steel .
National Investment and Infrastructure Fund (NIIF) and PSP Investment owned ROADIS will jointly set up a platform to invest upto $2 billion in road projects in India.
The platform will target Toll Operate Transfer (TOT) models, acquisitions of existing road concessions and investment opportunities in the road sector with the aim of creating a large roads platform in the country.
ROADIS currently manages 1,892 kilometres of highways, divided among ten concessions in Mexico, Brazil, Spain, Portugal and India. In India it manages 710 KM of highways.
The road network is a key enabler for the Indian economy to grow and sustain its position as the fastest growing major economy in the world, and this provides significant upside potential for investments, while creating value for users.
Operational road assets in India offer a steady cash-flow option to private investment firms- both Indian and global- with no construction risks to factor for.
The planned platform, which looks to invest in existing projects, will have a huge pool of assets to choose from.
Leading non-integrated steel players like Jindal Steel & Power Ltd (JSPL) and JSW Steel Ltd are set to profit from the muted hike in domestic iron ore prices.
The subdued iron ore prices would also benefit Tata Steel as Bhushan Steel (a company Tata Steel took over in insolvency resolution) sources ore from Odisha.
There has been a marked dichotomy in international and domestic prices of iron ore, driven by surge in production by Odisha’s merchant miners and lukewarm pellet prices as China’s steel makers have shown appetite for lower grade ore.
It is expected that domestic iron ore prices may remain under pressure, which will primarily benefit non-integrated steel players such as JSPL and JSW Steel. In NMDC’s case, notified prices could remain under pressure, though e-auction premium in Karnataka and exports realization are expected to remain robust in the wake of international prices remaining high.
The National Restaurant Association of India (NRAI) has appealed to the government to consider introducing a dual goods and services tax (GST), on the lines of what has been done for real estate, for the organised restaurant sector.
The withdrawal of input tax credit (ITC) under revised GST rate of 5% for restaurants have hit the businesses.
Real estate firms have time till May 10 to communicate to their respective jurisdictional officers whether they want to continue with the old GST rates with input tax credit, otherwise they will be deemed to have migrated to new tax rates.
The GST Council had given the option to real estate companies to either opt for old rates with input tax credit (ITC) benefits or the new tax rates without the benefit of adjusting the credit on inputs used during construction.
The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification giving real estate companies a one-time option to choose either of the tax rates.
In case, realtors do not exercise the option, they will be covered under the lower tax rate of 5 per cent and 1 per cent with effect from April 1, 2019, and will not be entitled to avail tax credit on inputs
Meanwhile, in a separate notification, the CBIC has asked the real estate companies that will be migrating to the new rates to prepare their books of accounts with regard to ITC and repay the over-used credit, if any, to the government in 24 instalments.
• In March 2019, Coal India has marked an eight per cent year-on-year growth in despatches, led by support from key subsidiaries. It is an improvement over the earlier declining volume trend.
• The key drivers of improved despatches have been improved rake availability (railways) along with good progress on coal evacuation infrastructure.
• While rising production and despatches are positives, domestic demand also remains robust. However, with declining international coal prices, imports are also rising. Higher inventory at Coal India and rising imports, both don’t bode well for the company’s more profitable e-auction sales, which are at market-determined prices. Coal India sells about 75 per cent of its volumes at notified (pre-determined) prices, which are lower than market rates. E-auction premium indicates the premium over notified price.
• E-auction premiums have declined in February from January 2019. Though premiums are still well above FY18 levels, they are showing a downward trajectory with a decline in imported coal prices. The decline in premium may be due to higher domestic coal inventory. Apart from volume concerns e-auction price decline have been a key reason for Coal India stock’s underperformance.
• Overall, while stock valuations remain attractive and coupled with strong dividend yield provide downside cushion, the Street will be keeping an eye on the trend in e-auction premiums.