Rakesh Jhunjhunwala bullish on metals; says commodity 'supercycle' could last 5-7 years

China announced intentions to release industrial metals from its national reserves to restrain commodity prices.

“Good cement stocks are valued at 30-40 times earnings, steel stocks are valued at 5-7 times earnings and people are doubting it. I am not talking about today’s prices, I am talking about last quarter prices. Everybody knows that cement stocks are going to prosper and steel prices are going to come down and they are not going to last; until there is doubt the prices are just going to go up. I am not bullish but extremely bullish on metal stocks both from earnings and valuation point of view,” said Jhunjhunwala.

Global brokerage Jefferies has a similar point of view and maintains a buy call on Tata Steel with the target at Rs 1,500 per share.

“Tata Steel’s FY21 annual report shows a rising focus on sustainability and also sets out specific targets for 2025/2030. India capacity expansion is a key strategic focus with the company working on separating the UK and Netherlands businesses,” Jefferies has noted.

Jhunjhunwala also gave a disclaimer, which is important to note here.

"I want to make a disclosure that I am an interested party and everything I say, please take it with a pinch of salt," he said.