Domestic non-ferrous industry earnings to remain under pressure in FY24: Icra

Earnings of domestic non-ferrous metal industry players remain under pressure in the ongoing fiscal amid weak demand, according to Icra.

Due to global macroeconomic uncertainties and weaker-than-earlier expected recovery in Chinese demand, international prices of the three non-ferrous metals viz. aluminium, copper and zinc fell by 11 per cent, 8 per cent and 30 per cent, respectively, in the last six months, the rating agency said in a report.

"The earnings of the industry would remain under pressure in FY2024, after a lacklustre performance in the last fiscal. Significant metal price corrections remain the key headwind affecting the margins, with no immediate relief in sight," it said.

The moderation in earnings, combined with the committed expansion plans of the players, is expected to increase the industry's leverage in FY2024. However, the debt protection metrics remain adequate in the base case scenario and, therefore, ICRA maintains a stable outlook on the sector.