Metal shares in demand; Tata Steel, JSW, JSPL, Welspun, SAIL rally up to 4%

At 11:48 AM; Nifty Metal index, top gainer among sectoral indices, was up 1.4 per cent, as compared to 0.2 per cent decline in the Nifty 50.

Metal shares price movement: Shares of metal companies have rallied by up to 4 per cent on the National Stock Exchange (NSE) in Wednesday’s intra-day trade in otherwise a weak market on the expectation of better earnings growth in the June quarter.

 

Tata Steel, JSW Steel, Jindal Steel and Power (JSPL), Welspun Corp, Steel Authority of India (SAIL), Vedanta, National Aluminium, Hindalco and Jindal Stainless (JSL) are trading higher in the range of 1 per cent to 4 per cent.

 

At 11:48 AM, the Nifty Metal index, top gainer among sectoral indices, was up 1.4 per cent, as compared to a 0.2 per cent decline in the Nifty 50. In the past month, the metal index has outperformed the market by soaring 6.5 per cent, as against a 3 per cent rise in the benchmark index.

Metals & Mining sector outlook

According to Kotak Institutional Equities, domestic steel margins should see a sharp sequential recovery in Q1FY26E, with higher prices and muted costs. Non- integrated players (JSPL/JSTL) are better placed amid the ongoing weakness in prices and costs.

 

Premium hard coking coal (HCC), at $176 per tonne, is down 5 per cent versus Q4FY25 averages; the brokerage firm expects it to remain range-bound, given weak global steel demand. Seaborne iron ore prices are down 8-9 per cent from 4QFY25 averages. 

 

Meanwhile, Tata Steel in its FY25 annual report said that the company is targeting ₹11,500 crore in cost savings during FY2025-26, with ₹4,000 crore expected from India through improvements in operating KPIs, workforce productivity, and supply chain efficiency. The UK business aims to reduce fixed costs from £995 million in FY2023-24 to £540 million in FY2025-26, while Tata Steel Nederland targets €500 million in savings in FY2025-26 through volume growth and operational improvements.

 

Analysts at ICICI Securities maintain a positive view on Tata Steel, driven by its strategic capacity expansion in India, levers for profitability improvement at both its Indian and European operations, amid continued focus on cost optimisation. Consequently, the brokerage firm said they assign a 'Buy' rating on Tata Steel with a SOTP-based target price of ₹200 (8x/4x EV/Ebitda to India/Europe business on FY27E).

 

According to Motilal Oswal Financial Services, Hindalco is well-positioned to capitalise on favourable long-term demand and pricing trends in the aluminium and copper sectors. The strong demand growth will be driven by rising applications in electric vehicles (EVs), electrification, packaging, transportation, renewable energy (RE) systems and construction. The supply-demand mismatch will ensure pricing resilience in the near to medium term. Novelis’ near-term cash flow will be under pressure due to the US tariff hike, the brokerage firm said in a stock update. Analysts reiterate ‘buy’ rating on stock with a target price of ₹ 800 per share.

 

Meanwhile, global aluminium demand is projected to grow at a CAGR of 3 per cent between 2024 and 2030, supported by decarbonisation trends and the transition to clean energy. Demand from EVs is expected to reach 31.7 million tonnes by 2030, while increased use of aluminium in solar panels and in replacing copper wiring in power infrastructure will drive further growth, Vedanta said in its FY25 annual report.

 

India remains a strong demand centre, with domestic consumption expected to grow over 8 per cent in FY 2025-26. Rising demand from sectors such as electronics, appliances, renewables, defence, and aerospace will continue to support this growth, the company said.