Non-ferrous metal producers delivered exceptional profitability improvements in Q1FY27, with the sector's EBITDA margin expanding to 23.2% from 17.8% in the corresponding quarter last year, according to Systematix Research. The broader metals and mining sector reported an average EBITDA margin of 21.6% in Q1FY27, compared with 18.6% a year earlier, marking a significant 298 basis points expansion. This surge was driven by higher aluminium and zinc realisations, lower input costs, and favorable commodity price movements across the sector.
Among individual companies, Vedanta Aluminium Metal reported the most dramatic year-on-year margin expansion, with EBITDA margin jumping 1,867 basis points to 48.8% in Q1FY27 from 30.1% a year earlier. NALCO followed with margin expansion of 1,187 basis points to 51.1%, while Hindustan Zinc posted a 1,093-basis-point increase to 61.8%. The strongest margin gains were attributed to favorable commodity prices, lower costs, operating leverage, stronger copper earnings, and improved alumina realisations across the non-ferrous segment.
Steelmakers demonstrated resilience with JSW Steel posting the strongest margin performance among large steel producers, with EBITDA margin rising 345 basis points year-on-year to 18.2%. SAIL's margin increased 514 basis points to 15.8%, while Tata Steel's expanded 127 basis points to 15.2%. However, Jindal Steel saw its margin decline 632 basis points from a high base in Q1FY26. Steelmakers are facing higher coking coal costs as supplies tighten in China, with coking coal futures in Dalian rising 15% this week to as much as ₹1,583.50 per tonne.
The mining segment presented mixed results in Q1FY27. NMDC remained relatively resilient with EBITDA margin at 36.3%, broadly stable from 36.8% a year earlier, while Coal India's margin declined to 23.5% from 31%. MOIL's EBITDA margin stood at 37.5%, compared with 40.1% a year earlier. Coal India reported higher maintenance and other expenses during the quarter, while MOIL's performance was supported by higher blended realisations and lower raw material costs, though sales volumes declined sequentially.
Copper prices have come under pressure after LME inventories increased by more than 35,000 tonnes, the biggest increase since 2024, while the premium for immediate-delivery copper over three-month contracts narrowed to $207 per tonne from as much as $545 earlier in the week. Aluminium prices have retreated after Emirates Global Aluminium's plans to restore production at its main smelter to pre-war levels in Q1FY27. Systematix expects higher sulfuric acid prices to support copper margins at Hindalco despite low treatment and refining charges, with copper EBITDA expected to remain similar in Q2FY27.
