Metal stocks gain up to 4% defying weak market; Q4 outlook remains strong

Metal stocks advanced as much as 4 per cent in trade on Thursday, defying weakness in the overall market. Nifty Metal index gained 1.7 per cent, logging an intra-day high at 12,286.55. 

 

At 12:30 PM, among the individual stocks, Hindalco jumped 3 per cent, followed by National Aluminium Company (Nalco) up 2.9 per cent, and NMDC rose 2 per cent. Among others, Vedanta, Welspun Corp, Tata Steel, Jindal Stainless, Lloyds Metals and Energy rose over 1 per cent each. 

 

Buying in the sector came despite a setback in overall market sentiment, as tensions in West Asia resurfaced just a day after the United States and Iran agreed to a temporary two-week ceasefire.

 

 

Gaurav Sharma, associate vice president and head of research at Globe Capital, said he remains positive on the metal sector from a long-term perspective, with optimism on stocks like Hindalco Industries and National Aluminium Company. He noted that aluminium has seen significant correction and appears undervalued, which could support a demand recovery.

 

Sharma added that Hindustan Copper has also corrected to attractive levels, though valuations are not very cheap, and rising raw metal prices could positively impact the company. Metal prices are expected to trend higher, benefiting Indian metal exporters supplying raw materials to markets like China and other global regions.

Metals Q4FY26 earnings expectations

According to Axis Securities, earnings before interest, tax, depreciation and amortisation (Ebitda) for steel companies are expected to grow both year-on-year (Y-o-Y) and quarter-on-quarter (Q-o-Q), supported by seasonal volume recovery and improving steel prices, aided by safeguard duties and strong post-monsoon construction demand.

 

However, despite a 22 per cent Y-o-Y rise in aluminium prices, companies like Hindalco and Nalco may see Ebitda pressure due to the Novelis fire impact and a sharp 41 per cent decline in alumina prices. Looking ahead to Q1FY27, steel spreads are likely to remain firm, while aluminium earnings could benefit from supply disruptions in the Middle East.

 

APL Apollo Tubes, Tata Steel, and Steel Authority of India (SAIL) are the top positive result plays of Axis Securities.

 

While Q3FY26 performance was largely led by the non-ferrous segment, analysts at Anand Rathi expect a sharp rebound in steel prices to drive improved performance in the ferrous sector in Q4FY26. Steel prices have recovered significantly since bottoming out in December 2025, with domestic HRC prices rising about 30 per cent to around ₹59,500 per tonne and rebar prices up nearly 29.5 per cent to ₹60,000 per tonne, the brokerage said.

 

The brokerage noted that India continues to remain central to global ferrous growth, supported by strong infrastructure spending, urbanisation, and manufacturing expansion. Aluminium prices have also seen an uptrend since March 2026, aided by supply disruptions in the Middle East impacting about 9 per cent of global supply and pushing prices higher.

 

On the cost front, coking coal prices have increased to around $251 per tonne in Q4FY26, while domestic iron ore prices rose by ₹150–200 per tonne, along with higher global shipping costs. However, Anand Rathi expects improved steel realisations to more than offset these cost pressures, with current spot prices remaining ₹3,000–5,000 per tonne above Q4 averages, supporting momentum into Q1FY27.

 

Lloyds Metals and Energy, Tata Steel, and Indian Metals & Ferro Alloys are the top picks by Anand Rathi. 

  Disclaimer: The views and investment tips expressed by the analysts/brokerage are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.