Metal
Stocks Outlook for the week 01 to 05.09.2014
( www.rupeedesk.in )
Stocks of metal
companies are expected to remain under pressure next week, with the
Supreme Court on
Monday scheduled to conduct another hearing on the fate of coal
blocks allocated
since 1993.
The apex court may
let off the companies with a mere fine, in which case the market
might move up as a
likely penalty has already been factored into share prices. However,
if coal blocks are to
be de-allocated, metal stocks will plummet.
Complete
de-allocation would hit Jindal Steel and Power the most, followed by Hindalco
Industries. Jindal
Steel's Utkal B-1 coal block in Odisha is the key source of raw material
for its Angul plant
while the Talabira-II mines have been jointly allocated to Hindalco
and two state-owned
companies.
"For JSPL, the
SC ruling not only creates uncertainty on profitability from existing
operational coal
blocks but also on the profitability of the $2.6 bln investment in the
Angul Steel &
Power project as the associated Utkal B1 block is unlikely to be allocated now
