Kalyani Steels (KSL), which manufactures steel long products, had seen respectable Q3 results, but the double-digit net profit growth numbers - yoy net profit grew 31% - doesn't disguise the fact that profit growth is lower than historical averages due to increasingly expensive inputs - the prices of iron ore and coking coal have shot up, putting pressure on the company's margins. The falling rupee has also increased costs, since almost all coking coal is imported into the country. 

The company is likely to maintain its margins nevertheless, due to cost reductions and volume growth - and India’s projected growth at 7% or more over the next year, and the strong infrastructure focus in the Budget, with priority on domestic steel, should benefit Kalyani. India has also upped its defence spending, another plus for the company.

Analysts such as BOB Capital Markets expect KSL to grow at a CAGR of approximately 10% over FY16-19E - the analyst take is that this remains a strong stock for medium and long-term investors, with "limited upside" for the short-term. KSL has been trading above all its averages, up 147% from its 52 week low.