In an interview with ET Now, Parag Thakkar, Head Institutional Sales, HDFC Securities, talks about the factors that are weighing on the steel sector.
Q: What have you made of the two or three results that have come out overnight such as that of Jindal Steel and Power (JSPL)?
A: Clearly, the steel industry is passing through its worst times because steel prices are falling, imports are increasing. The industry just needs some help from the government in terms of increasing duty or something like that.
It is not just steel companies that are going through problems.
The problems these steel companies are facing are causing a lot of asset quality issues for banks.
Banks are already facing several issues due to their exposure to power and infra sectors. Those with large exposure to large steel companies such JSPL that has been reporting losses is a cause of concern. It also raises concerns over what happens to smaller companies, which are not integrated.
Source: The Economic Times
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