Icra sees FY20 steel demand growth shrinking to 5-6% from 7.9% in FY19

Industry's total debt/OPBITDA seen at 4.5 times in FY20 vs 3.5 times in FY19

Domestic steel consumption growth is expected to decelerate to around 5-6 per cent this fiscal, from 7.9 per cent in FY2019, on the back of an unprecedented slowdown in economic activity, said Icra in its report today.

The country’s GDP growth tapered to 5.0 per cent in Q1 FY2020.

Consequently, margin outlook for steelmakers has weakened in Q2 due to a sharp fall in steel prices and firm raw material costs, it said.

According to Icra, the demand environment is expected to improve somewhat in the second half of FY2020, following a likely pick-up in infra spending.

“Industry operating environment