Maharatna-To-Navratna Stock: Prabhudas Lilladher Recommends Sell On 2 Metal PSU Stocks Trading From Rs 150-200

Prabhudas Lilladher has recommended SELL on two metal PSU stocks namely National Aluminium and SAIL. While SAIL is a Maharatna CPSE, NALCO holds the status of Navratna. YTD, SAIL share price has zoomed by 22%, and NALCO has outperformed even peers like Tata Steel, Vedanta and Hindalco by surging over 46.5% so far.

Prabhudas has set target price of Rs 134 on SAIL while recommending SAIL, while on NALCO, the brokerage set a target price of Rs 142.

The brokerage's stance comes at a time when domestic steel prices are falling.

As per the brokerage, Indian benchmark HRC prices declined by another Rs200/t WoW to Rs53,000/t. Spot spreads declined 2% WoW to Rs23,978/t as coking coal prices inched up again to USD269/t (CNF Paradip). Odisha 63% grade lumps remained flat WoW at Rs6500/t.

Looking aheadDomestic steel pricing is expected to decline further as global pricing is on a downtick amidst seasonally weak quarter. Both Long and Flat product prices are weak affected by import pressure, weak exports, muted domestic demand and expected ramping up of upcoming capacities in 2HFY25. Softer coking coal prices are expected to aid margins from 2Q, Prabhudas added.

It further said, base metal prices are holding up WoW except Aluminum which has declined this week as China ramped up production in May'24 (5% YoY to 3.65mt). In such a scenario, the brokerage suggests selling the two mentioned PSU metal stocks.