However, he is hopeful that the series of initiatives announced by the government since the budget that roiled the sentiment for almost every sector, and the ongoing festive season can improve the sentiment, and thus the second half should be better.
Rao also blames the extended and heavy rains for the demand slowdown as the construction sector has come to a standstill.
"Given the recent government initiatives coupled with the Reserve Bank slashing key rates for the fifth time in a row, the second half should be better. However so far we have not seen anything moving on the ground due to the extended monsoons," Rao says.
He, however, notes that though the sentiment may improve, the credit flow into the system will take some more time.
Welcoming the recent NMDC decision to renew the leases of the Donimalai mines in Karnataka, he says this will augment iron ore supply to the raw material starved steel plants in the state. The company has one of its largest facilities in the state.
"We see this as a positive move as it will enhance the supply benefitting the iron ore starved sponge iron/ pellet/steel plants in Karnataka," he says.
Asked if the company is changing its strategy towards the upcoming Odisha mine auctions, he said that "we will continue to be cautious and not aggressive in our bidding."
"We have given a guidance of 1.5 per cent growth this year so we haven't anticipated a big growth in our production or sales numbers," he says when asked whether they will revisit its production targets and guidance for the fiscal.
The company has set a target to increase its crude steel production and saleable steel sales to 16.95 million tonne and 16 million tonne, a rise of 1.5 per cent over FY2018-19, respectively.
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