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Credit rating agency ICRA’s Senior Vice-President & Group Head, Corporate Sector, Jayanta Roy has said that after a challenging September quarter, the profitability of domestic steel makers is expected to improve in the October-December quarter (Q3FY23) given lower coking coal costs, and an expected pick-up in capacity utilisation rates on the back of better domestic demand conditions.

Roy said that the financial performance of Indian steel companies in Q2FY23 has been adversely impacted by falling steel prices on one hand, and high raw material prices, especially coking coal, on the other. In the July-September 2022, the top five steel makers of India -- which control about 60 per cent market -- have either reported loss or have posted sharp fall in their net profits citing adverse market conditions.

Kaustubh Chaubal, Senior Vice President, Corporate Finance at Moody's Investors Service said leading steelmakers reported dampened earnings for a seasonally weak July-September period, amid elevated input and other costs and a steep decline in steel prices. He said even so, India remains a bright spot in the region, with a high-single-digit percentage growth in steel consumption over the next 12 months supported by demand for autos and continued infrastructure spending by the government.