India Ratings and Research (Ind-Ra) said it also expects the sector’s strengthened balance sheets to support ongoing investments without materially weakening leverage metrics, although the execution of expansion projects, carbon-transition requirements, and export-related regulations are key monitorables.
The agency said, “India will remain among the fastest-growing steel markets globally in FY27 amid oversupply in global steel markets, geopolitical uncertainties, evolving trade barriers, and tightening sustainability regulations”.
Read More: Jindal Steel to spend less, focus on utilising capacity: MD VR Sharma
Ind-Ra expects India’s steel demand to grow at a high-single-digit percentage year-on-year in FY27 (from 7.4 per cent in FY26), driven by the government’s continued infrastructure spending, healthy demand from the construction, engineering, and automotive sectors, and a likely pickup in private corporate capex.
Ind-Ra has maintained a neutral outlook on the Indian steel sector for FY27, with strong domestic demand, supportive trade measures, stable raw-material costs, and disciplined capacity expansion continuing to support profitability, cash flows, and credit profiles.
“India’s steel demand outlook remains structurally positive, supported by infrastructure and manufacturing growth. The profitability of steel players is also supported by the government imposing safeguard duties.Read More: Tata Steel UK expects electricity access for EAF project by 2029: CEO Narendran
“However, raw material price volatility, significant capacity expansion risks, lower import quota in the EU, and the impact of Carbon Border Adjustment Tax (CBAM) on EU exports are the key near- to medium-term monitorables,” said Rohit Sadaka, Director-Large Corporates, Ind-Ra.