Investors fear big decline in metal companies' margins and profits

The metal sector also faces headwinds from an investment slowdown in China that accounts for more than half the global metal demand

Investor fears of an earnings growth in the metals and mining space is at its worst in a decade, leading to a sharp fall in the valuation of stocks in the sector.

The S&P BSE Metal Index is currently trading at a trailing price-to-earnings (P/E) multiple of 4.5x — the lowest in over a decade. The combined market capitalisation (m-cap) of the 10 stocks that are part of the BSE Metal index is down 30 per cent in the past three months as investors fear a big decline in metal companies’ margins and profits in 2022-23 (FY23) due to a