Brokerage upgrades, stellar Q3 earnings, and aluminium tailwinds spark a powerful surge across metal stocks.
The Nifty Metal index rallied as much as 3% in intraday trade on Wednesday, making it the NSE’s top sectoral gainer and setting the tone for metal stocks.
By 10:49 AM, the index had vaulted 2.6%, leaving the Nifty 50—which rose 0.75%—in its wake.
This surge lifted both ferrous and non-ferrous counters, with heavyweight names reaching fresh peaks as the momentum spread across the sector.
Record Highs for Steel Majors
Tata Steel, JSW Steel, and Jindal Steel touched their respective all-time highs on the NSE.
- Tata Steel soared 3% to ₹216.35
- JSW Steel rocketed to ₹1,278
- Jindal Steel leapt to ₹1,258.50
Alongside the rally in steel majors, broader gains saw Vedanta, Lloyds Metals & Energy, SAIL, Nalco, and Hindustan Zinc jump between 3% and 5%.
These moves collectively signal renewed investor appetite for cyclicals, reflecting improving earnings visibility in the sector.
Vedanta Upgrade Sparks Buying
A key catalyst lit up Vedanta: a 5% surge to ₹732.35 after BoFA Securities flipped its rating to ‘Buy’ from ‘Neutral’.
The brokerage also raised its price target by 75% to ₹840, from ₹480 earlier.
BoFA cited:
- A bullish outlook on aluminium
- Supportive silver prices
- A healthy ~6% dividend yield
- Reduced leverage at the parent level
Furthermore, reports suggest the deleveraging minimizes the risk of higher brand-fee rates on inter-corporate loans, thereby easing overhang concerns for investors.
In addition to Vedanta, Nomura initiated coverage on Lloyds Metals and Energy with a ‘Buy’ rating and a target price of ₹1,600, citing its transition toward an integrated steel model and diversified revenue base.
Q3FY26: Margin Resilience Emerges
For the October–December 2025 quarter, non-ferrous players delivered their strongest earnings growth.
Higher commodity prices, stable volumes, and backward integration drove:
- 63 bps Y-o-Y Ebitda margin expansion
- 116 bps Q-o-Q improvement
Despite these margin improvements, divergence persists across the sector.
Systematix Institutional Equities observed that steel and non-ferrous companies displayed margin resilience, attributing this to improved operational efficiencies and a favorable product mix. However, analysts noted that mining companies faced volume declines and higher costs.
The near-term trajectory hinges on:
- Realisation trends
- Raw material costs
- Domestic demand momentum
Steel Price Hikes and Global Aluminium Dynamics
Multiple steel price hikes since the launch of the safeguard duties are set to supercharge spreads in Q4FY26.
However, rising coking coal costs and ongoing import flows remain variables to watch.
According to Systematix, Jindal Steel and Tata Steel are well-positioned in the ferrous sector due to their capacity expansion initiatives and ongoing cost optimization efforts.
Valuations also remain in focus:
- Hindustan Zinc trades at 9.8x/8.3x FY27E/FY28E
- Vedanta at 4.4x/4.3x
- Hindalco at 5.3x/4.7x
Analysts expect Hindustan Zinc to benefit from strong silver-led earnings, while Vedanta’s performance is anticipated to depend on factors including its aluminium, zinc, silver, and power businesses, as well as ongoing deleveraging and a possible demerger.
Axis Securities noted that aluminium demand remains strong across the US in Europe in the packaging and electrical industries. Analysts highlighted that global supply growth was constrained in 2025 by operational issues and noted that China’s 45 million tonne capacity ceiling structurally limits output.
Building on this, demand growth across North America and Europe, coupled with China’s expanding battery storage sector, could sustain regional deficits into 2026.
Metal stocks often move in cycles; when earnings, policy support, and global supply dynamics align, the upswing can be powerful. The question remains: is this the start of a sustained re-rating, or just another tactical trade?
TL;DR
Overall, Nifty Metal jumped up to 3% as Vedanta surged on a BoFA upgrade, while Tata Steel, JSW Steel, and Jindal Steel hit record highs. These developments, along with strong Q3FY26 margins, steel price hikes, and resilient global aluminium demand, helped boost sentiment across both ferrous and non-ferrous stocks.
AI summary
- Nifty Metal up 3%, top sectoral gainer
- Tata Steel, JSW, and Jindal hit all-time highs.
- Vedanta upgraded to ‘Buy’ by BoFA.
- Q3 margins expand 63 bps YoY.
- Aluminium demand is resilient globally.
