Indian metals and mining companies demonstrated significant improvements across the board in the fourth quarter of fiscal year 2026, according to a recent report from Systematix Institutional Equities. The robust performance was primarily driven by enhanced realisations, healthy volume growth, and operational efficiencies.
Sector-Wide Gains and Uneven Performance
Systematix noted that primary steel, mining, pipes and tubes, and non-ferrous companies all exhibited positive earnings trends. However, the performance varied across individual names within these segments. Key drivers for the quarter included improving steel spreads, favorable commodity prices, ongoing capacity expansions, and strong demand fueled by infrastructure projects.
Looking ahead, the sector's medium-term trajectory is expected to be shaped by realisation trends, raw material costs, a recovery in export markets, and the successful execution of ongoing projects.
Primary Steel Producers See Gains
- Tata Steel: Benefited from increased standalone profitability and a reduction in losses from its UK operations.
- JSW Steel: Reported higher realisations, successful capacity ramp-ups, and an ambitious plan to expand capacity to 62 million tonnes by FY32.
- SAIL: Outperformed due to effective inventory liquidation, operational efficiencies, and increased dispatches, leading to a sharp recovery in margins.
Mining Companies Show Mixed Results
- NMDC: Stood out as the strongest performer in mining, achieving 21 percent year-on-year volume growth and benefiting from higher iron ore prices.
- Coal India: Maintained strong realisations and profitability despite lower e-auction premiums and dispatches.
- MOIL: Faced challenges from weaker manganese realisations and increased employee costs, putting pressure on its performance.
Steel Pipes and Tubes: Resilience Amid Headwinds
- APL Apollo Tubes: Maintained an impressive EBITDA per tonne above Rs 5,500, even amidst broader macroeconomic headwinds.
- Welspun Corp: Is well-positioned to capitalize on multi-year opportunities in US LNG, gas pipelines, and Saudi Arabian infrastructure projects, despite temporary margin pressures from inventory issues.
- Jindal Saw: Experienced disruptions in exports, underutilization, logistics challenges, and an API license suspension. Systematix anticipates a recovery through improved utilization and API certification renewal.
Non-Ferrous Leads Earnings Growth
Non-ferrous companies were at the forefront of earnings growth for the quarter:
- Vedanta & Hindustan Zinc: Benefited significantly from higher commodity prices, production growth, reduced costs, and ongoing expansion projects.
- Hindalco: Its India operations demonstrated resilience despite a weaker performance from its Novelis subsidiary.
- NALCO: Faced pressure due to lower alumina realisations and rising input costs.
Systematix's Top Picks and Price Targets
Systematix Institutional Equities has identified several top picks within the sector, issuing updated ratings and target prices:
'Buy' Rated Stocks:
- NMDC: Target Price: Rs 112
- Welspun Corp: Target Price: Rs 1,610
- Jindal Saw: Target Price: Rs 298
- JSW Steel: Target Price: Rs 1,520
- APL Apollo Tubes: Target Price: Rs 2,265
- Hindustan Zinc: Target Price: Rs 724
- Vedanta: Target Price: Rs 944 (Note: This target is for consolidated Vedanta, prior to its demerger.)
'Hold' Rated Stocks:
- Tata Steel: Target Price: Rs 201
- SAIL: Target Price: Rs 215
- Hindalco: Target Price: Rs 1,111
- Nalco: Target Price: Rs 442
'Sell' Rated Stocks:
- Coal India: Target Price: Rs 417
Disclaimer: This article provides stock market news for informational purposes only and should not be considered investment advice. Readers are strongly encouraged to consult with a qualified financial advisor before making any investment decisions.