Nifty Metal slips 2%; InCred downgrades Hindalco, Nalco to 'Reduce'

Individually, Hindalco and Nalco shares fell as aluminium prices peaked, which does not bode well for Indian aluminium companies, as it may impact their earnings, according to InCred Equities

Shares of metal companies fell in trade on Tuesday, February 17, 2026, up to 4.4 per cent on the National Stock Exchange (NSE). Nifty Metal index fell 2 per cent to an intra-day low at 11,713.05. 

 

At 11:54 AM, among others, shares of Hindustan Copper were trading 3.44 per cent lower, followed by Steel Authority of India (SAIL), Jindal Stainless, National Aluminium Company (Nalco), and Hindalco down over 2 per cent. Similarly, Vedanta, Hindustan Zinc, NMDC, and Tata Steel were down over 1 per cent.

 

InCred Equities downgraded Hindalco and Nalco to ‘Reduce’ with a target of ₹631 per share and ₹302, respectively. Analysts believe the stocks are pricing in current (spot) aluminium prices, and those prices carry a high risk of correcting sharply as supply dynamics (especially scrap availability) improve, and the rally—seen as macro-driven—fades. If aluminium prices cool, earnings and margins for Indian aluminium operations can weaken, making current valuations look stretched.

 

 

For Hindalco, there is an added negative: its US subsidiary Novelis is facing elevated electricity costs. A surge in power demand in the US, driven by AI and data centres, has pushed power prices very high, which is eroding Novelis’s margins. Since the brokerage does not expect power costs to ease meaningfully in the near term, it expects Novelis’s Earnings before interest, tax, depreciation, and amortisation (Ebitda) per tonne to remain under pressure, reinforcing the downgrade.

 

InCred Equities believes the recent rise in aluminium prices appears driven more by macroeconomic factors, especially US dollar weakness, than by cost pressure. Most primary smelters remain profitable even as alumina margins are weak, suggesting that prices may be reflecting financial conditions rather than purely physical fundamentals.

 

Meanwhile, Hindustan Zinc and Vedanta shares were under pressure after silver prices declined. Hindustan Zinc, a Vedanta Group company, is the world’s largest integrated zinc producer and is amongst the top five silver producers globally. Hindustan Zinc is a subsidiary of Vedanta, which holds a 61.8 per cent stake in the company, while 28 per cent is held by the Government of India, as on December 31, 2025. 

 

On the Multi Commodity Exchange (MCX), spot silver price slipped nearly 2 per cent to ₹2,41,318, around 12:41 PM. 

 

Meanwhile, analysts at InCred view steel as a strategic commodity, noting that rising protectionism is increasingly insulating domestic producers globally. In India, policy support, safeguard measures, and the likelihood of regulatory adjustments are enhancing industry visibility. Furthermore, long-term demand growth and a protected downside in prices are driving a structural rerating, reminiscent of past commodity cycles seen in the cement sector.

 

The brokerage has picked Tata Steel as its top bet with an ‘Add’ rating and a target of ₹224 per share.  

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