In 2021 IMF Reduced CY 2021 Global GDP Forecast to 5.9% due to delta Variant outbreaks in turn leading to global supply chain disruptions, longer than expected lead times & high inflation in many countries. GDP Growth global for 2022 is 4.9%. Recovery is estimated to be divergent across the globe with developed economies registering strong growth on the back of high vaccinations.
In India, steady vaccination ramp up & easing covid restrictions have to lead to a strong bounce back in economic activity. Recent high-frequency indicators are reflecting improvement in business sentiments especially late August. However Domestic Auto Production, especially passenger cars declined on the back of global chip shortages, albeit is expected to revive once chip supply eases. Construction & Infra activities are expected to gain momentum in the second half of 2022. Strong Direct and indirect Tax revenue reflect an economic revival. Goverment initiatives like "National Monetization Pipeline", GatiShakti & NIP are already on the way to boost. Residential markets are on good improvements.
India’s annual consumption of Steel is now 100mt. India is World's 2nd Largest Steel Producer & Growth is driven by domestic demand as well as the availability of Raw Materials & Cost-effective labor. It is one of the major contributors to India’s manufacturing output. As we can see around 50 Listed companies but 80% of Revenue comes from the top 5 & 80% profit from the top 2 i.e. Tata Steel and JSW Steel the Largest Players.
The industry has grown well during the last 2 decades but the majority of them are in high debt burden hence making losses, Just a few of them make a Profit, and that too with the low average margin of 3%. Hard to find a company with long profit-making Consistency yet can consider Jswsteel as a good one from the Wealth Destroyer Industry. The current Year trend is good as Margins have improved and demand is back. We may see lIfetime high profits from some companies.