New Delhi, Oct. 7 -- India's secondary steel industry is expected to see a modest profitability recovery this fiscal, driven mainly by backward integration and captive power investments, according to Crisil Ratings.

In a report, Crisil said operating margins are expected to rise by nearly 50 basis points to 6.6 per cent from 6.1 per cent last fiscal, as producers offset persistent raw material and energy cost pressures.

Crisil's analysis of 130 rated secondary steel makers, accounting for around 30 per cent of sector revenue, shows a shift towards controlling inputs and operating costs rather than aggressive capacity expansion.

Domestic long steel demand is expected to grow around 7 per cent, supported by government spending on roads, ...