Metal stocks demonstrated strong momentum in early trading on Monday, April 27, with the NIFTY METAL index trading over 1.6% higher. According to reports from Upstox, all 15 constituents of the index were trading in positive territory, indicating broad-based strength across the sector. Individual stock performance showed Vedanta trading over 0.6% higher at ₹725.35 on the NSE, while SAIL was trading nearly 3% higher and Hindustan Zinc was also trading over 2.3% higher. The sector has maintained this positive trajectory, with data showing the NIFTY METAL index rallying 16% in one month.
The sharp rally in metal stocks is being driven by multiple favorable factors, as reported by Upstox. Firm commodity prices and a bullish stance by leading analysts have contributed significantly to the sector's performance. Strong quarterly numbers by companies such as Hindustan Zinc (HZL) also boosted the sentiment. Additionally, rising prices of base metals like aluminium, zinc, and copper amid supply constraints and expectations of demand recovery, particularly from China, have been key factors supporting the rally. A weaker dollar has also aided commodity prices, making metals more attractive globally, while expectations of infrastructure spending and industrial demand in key economies have further boosted the outlook.
Leading financial institutions have turned increasingly constructive on the metal sector, citing favorable macroeconomic conditions and improving fundamentals. According to Upstox, Goldman Sachs has initiated coverage on the steel sector with a positive stance, highlighting a shift 'from cyclical to structural' growth. The financial services firm expects domestic steel demand to double by FY32, led by infrastructure spending, automobile demand, and the energy transition. With per capita steel consumption at 102 kg, well below the global average of 215 kg, Goldman Sachs sees significant growth potential supporting long-term valuations. Jefferies highlighted improving global dynamics, noting that China's steel exports have declined 9% YoY in Q1 CY25, alongside a 6% drop in production, which is helping rebalance markets.
Analysts have provided detailed assessments of major steel companies, as reported by Upstox. JSW Steel is positioned well for growth due to strong capacity expansion, downstream integration, operational leverage, and a healthy balance sheet. Shyam Metalics benefits from diversified exposure across carbon steel, stainless steel, and aluminium, along with lower leverage and stable margins. Tata Steel faces uncertainty over iron ore costs post FY30, which may cap valuations despite expected structural EBITDA improvement through FY28. Jindal Steel and Power shows positive capacity ramp-up potential, while NMDC earnings may be impacted by slow diversification progress.
The positive sentiment in metal stocks is supported by multiple structural factors and analyst expectations. According to Upstox, analysts note that expectations of infrastructure spending and industrial demand in key economies have further boosted the outlook. Jefferies expects FY27–28 earnings for JSW Steel and Tata Steel to be 5–28% above Street estimates. Additionally, HSBC expects positive developments around Novelco Industries in CY26, particularly at key projects like Oswego and Bay Minette, which could improve earnings visibility. The mining conglomerate Vedanta's demerger and listing of separate metal companies also represents a key interest for market participants, contributing to the sector's overall attractiveness.
