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| Indian steel |
Strong Domestic Demand and Stable Steel Profitability
Indian domestic steelmakers will successfully maintain robust operating profitability throughout the 2027 financial year despite rising production expenses. Therefore, Crisil Ratings projects operating margins to remain steady at 10,500 to 11,000 rupees per tonne. Consequently, robust domestic demand growth of 5 to 7 percent fully offsets rising raw material costs.
Domestic steel prices are expected to rise by 6 to 8 percent, driven by strong infrastructure investments and automotive expansion. However, production costs will increase as coking coal prices climb by up to 7 percent due to supply disruption risks. As a result, companies rely on protective government duties and strategic pricing power to protect their bottom lines.
India maintains strong long-term consumption potential as per capita steel usage remains well below the global average. Furthermore, robust capital expenditure programs help major steel producers improve net debt-to-EBITDA ratios while expanding production capacities. Therefore, the Indian steel sector demonstrates exceptional resilience against global macroeconomic headwinds and regional conflicts.
ScrapInsight Commentary
Indian steelmakers successfully offset rising input costs through strong domestic infrastructure demand and protective trade duties.
Continued capacity expansion and robust capital investments reinforce the sector's long-term profitability outlook.
