Metal companies may trim capex further to avert cash-flow mismatch

Tata Steel has revised its planned capex for 2019-20 to Rs 8,000 crore, from the earlier Rs 12,000 crore

To avert cash flow mismatch, have sufficient cushioning and no hiccups in loan repayment, Indian metal companies could further cut their capital expenditure (capex) for this financial year.

Significant revenue decline in the September quarter, an indication of lower cash flow, has already prompted a move in this direction. Tata Steel, JSW Steel, Vedanta and Hindalco Industries have all cut their capex. 

“Steel demand revival in the domestic market post monsoon is only marginal so far. Demand from white goods and the automobiles segment (due to revised contract prices) would help only a bit, as they together form 15-20 per cent of