Deven Choksey says metal sector is in a goldilocks scenario
The metal sector stands as a compelling investment opportunity, driven by the strong demand from both domestic and international forces, as well as the anticipated stability in metal prices. These factors collectively contribute to a positive outlook for the metal industry.
The metal sector is poised for growth, driven by various factors both domestically and globally. In India, capital infrastructure projects and government investments in infrastructure have spurred an increase in demand, particularly benefiting the automotive industry.
Deven Choksey, Managing Director of DRChoksey Finserv, highlighted the role of investments in renewable energy and the global push towards carbon neutrality, suggesting a pivotal shift in the metal commodity industry.
“The auto, which is a mainstay, is also giving a larger thrust with higher volume growth. As Maruti said doubling the size by 2030 of the market, the structural demand for steel is increasing. So, this is an opportunity,” Choksey told CNBC-TV18.
Recent data from the Federation of Automobile Dealers Associations (FADA) showcases the resurgence in the Indian automotive retail sector. Auto sales in September jumped 20% YoY. While tractor sales saw a 10% dip, all other vehicle segments, including motorcycles (22% growth), three-wheelers (49% growth), passenger vehicles (19% growth), and commercial vehicles (5% growth), recorded positive momentum.
On the global front, Choksey remarked that China's stabilization could open up lucrative investment avenues in the metal sector.
"I am not saying that everything is going to be priced in the next couple of quarters, but the systematic demand scenario is likely to grow in this particular space. So, it's a case for investment, given the strong demand and given the stability in the price that we are expecting," he said.
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(Edited by : Shweta Mungre)
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