Introduction:
India’s focus on infrastructure development makes investing in related company stocks a great opportunity. This includes stocks in infrastructure, metal companies, and material producers. With fast industrial growth, infrastructure projects, and rising demand, the metal industry in India remains promising for investors. In this article, let’s get an overview of the Indian metal industry and do a brief metal stock analysis of the top companies in the metal sector stocks.
What are metal stocks?
Metal stocks are shares of companies that explore, produce, process, or distribute metals like steel, aluminum, copper, and zinc. Companies in this sector may run mines, smelters, refineries, or other facilities involved in metal extraction and processing. Investing in metal stocks allows you to benefit from the metal industry’s performance without physically owning or storing metals, making them a popular choice for adding commodity exposure to your portfolio.
However, with the benefit of exposure comes the risk of volatility due to changes in the demand or supply of commodities, price fluctuation, and geopolitical factors affecting the global market. So, before you shortlist the companies for investment or head to find an undervalued stock for long-term investment, get a thorough idea of the market and overall sectoral performance. One way metal stock analysts track the sector’s progress is by watching the NIFTY Metal index on the NSE (National Stock Exchange).
The NIFTY Metal index reflects the cumulative performance of 15 metal stocks on the NSE. As of 30th August 2024, the NIFTY Metal index posted a one-year total return of 41.94%, outperforming the NIFTY50 index (32.64%).
Is development the only reason why metal stocks are outperforming? Let’s answer this with a synopsis of the Indian metal market.
Overview of the Metal Sector:
India’s metal industry is crucial to the nation’s construction and infrastructure growth. Its strategic location allows India to export metals, especially to rapidly growing Asian markets. The industry offers strong investment opportunities, supported by the National Mineral Policy 2019 and the Mines and Minerals (Development and Regulation) Amendment Act 2021. With rich reserves of minerals like bauxite, iron ore, and manganese, the sector is positioned for further reform, driven by initiatives like Smart Cities and Make in India. In fact, the Indian metal sector is expected to grow at a rate of 8% to 9% annually.
The metal industry is vital to India’s economy owing to its contribution to GDP, job creation, and foreign exchange reserves. It also plays a key role in India’s ambition to become a USD 5 trillion economy by 2024-25. The India Metal Fabrication Market is currently worth USD 20.89 billion (2023) and is expected to grow to USD 28.46 billion by 2028. Investing in the metal sector can be a way to support the country’s growth. Additionally, metal stocks offer protection against inflation, as precious metals like silver, palladium and gold tend to retain their value, providing a reliable hedge when prices rise.
Top Metal Stocks List (2024)
As of 10th September 2024, the top metal stocks of India, as per the market capitalization, are as follows-
| Stock Name | Market Cap (in Rs. Cr) | Share Price | PE Ratio | 1-year Return | 5-Year CAGR Return |
| JSW Steel Ltd.. | Rs.2,29,628.13 | Rs.939.00 | 32.23 | 15.08% | 33% |
| Hindustan Zinc Ltd. | Rs.2,05,350.50 | Rs.486.00 | 24.92 | 52.06% | 17% |
| Tata Steel Ltd.. | Rs.1,86,741.08 | Rs.149.59 | 51.71 | 15.38% | 32% |
| Vedanta Ltd. | Rs.1,72,115.73 | Rs.440.15 | 21.69 | 85.07% | 24% |
| Hindalco Industries Ltd.. | Rs.1,48,428.65 | Rs.660.50 | 13.47 | 38.51% | 27% |
| Jindal Steel And Power Ltd. | Rs.97,357.21 | Rs.955.20 | 17.26 | 33.94% | 55% |
| NMDC Ltd. | Rs.61,595.47 | Rs.210.18 | 10.00 | 45.53% | 26% |
| Jindal Stainless Ltd. | Rs.61,218.24 | Rs.744.00 | 24.23 | 42.56% | 83% |
| Steel Authority of India Ltd. | Rs.53,316.82 | Rs.129.24 | 14.66 | 29.00% | 31% |
| National Aluminium Co Ltd. | Rs.31,951.88 | Rs.173.97 | 16.19 | 71.18% | 31% |
Data taken from NSE, Screener, and Moneycontrol)
Overview of Top Metal Stocks:
JSW Steel Limited:
JSW Steel Limited, an India-based company, manufactures and sells iron and steel products. It operates as an integrated manufacturer, offering a wide range of steel items. Its product lineup includes flat and long steel, cold-rolled coils, sheets, galvanized and galvalume products, tinplate, and various steel bars. The company’s popular brands include JSW Radiance, JSW Colouron+, JSW Everglow, JSW Pragati+, JSW Vishwas, and JSW Vishwas+. With a global presence in 100+ countries, JSW Steel remains a key player in the industry. In FY2024, it reported revenue of Rs.1,75,006 crore and a net profit of Rs.8,973 crore, with a return on capital employed (ROCE) of 13.1%.
Hindustan Zinc Limited:
Hindustan Zinc, incorporated in 1966, is the world’s 2nd largest integrated zinc producer and the 5th largest silver producer globally, with an annual silver production of about 714 tonnes. It holds a 75% share of India’s zinc market. Headquartered in Zinc City, Udaipur, the company operates zinc-lead mines and smelting complexes across Rajasthan. It’s a subsidiary of Vedanta Limited and runs five zinc-lead mines, four zinc smelters, a lead smelter, and a silver refinery, among others. Hindustan Zinc also operates thermal, solar, and wind power plants. In FY2024, it posted a revenue of Rs.28,934 crore and maintained a healthy dividend payout of 151%.
Tata Steel Limited:
Tata Steel Ltd, founded in 1907, is Asia’s first integrated private steel company. It covers the entire steel production process, from mining iron ore and coal to distributing finished products. The company operates in four segments: industrial products, projects and exports, automotive and special products, and branded products and retail. Its offerings include galvanized steel, hot-rolled and cold-rolled products, wire rods, rebars, and more. Some of its brands include Tata Structura, Tata KOSH, Tata Steelium, Ferromag, and Galvano. In the Q1FY25, Tata Steel reported revenue of Rs.54,771 crore and a net profit of Rs.919 crore.
Vedanta Limited:
Vedanta Ltd is a natural resource company involved in exploring, extracting, and processing minerals and oil & gas. It produces and sells zinc, lead, silver, copper, aluminum, iron ore, and oil & gas. The company operates in India, South Africa, Namibia, Ireland, Liberia, and the UAE. It also has commercial power generation, steel manufacturing, port operations in India, and glass substrate manufacturing in South Korea and Taiwan. After acquiring a Nickel and Cobalt plant in Goa, Vedanta became India’s sole Nickel producer. It holds 64.9% of Hindustan Zinc and 53.9% of Sterlite. In FY2024, Vedanta reported revenue of Rs.143,727 crore and a net profit of Rs.7539 crore.
Hindalco Industries Limited:
Hindalco Industries Ltd., a key part of the Aditya Birla Group, was founded in 1958. It focuses on producing aluminium and copper, along with aluminium sheets, extrusions, and light-gauge products for packaging, including cans and foils. The company ranks among the top five global aluminium producers based on shipments, known for its low-cost production and integrated value chain. Its copper division operates one of the largest single-location copper smelters globally. As of the Q1FY25, , Hindalco reported a revenue of Rs.57,013 crore, a net profit of Rs.3,074 crore, and a return on capital employed (ROCE) of 11.3%.
Bottomline:
Investing in metal stocks in India can be attractive due to the country’s industrial growth and infrastructure development, which boosts demand for metals. Steel and aluminum are crucial in construction and manufacturing, especially with rising urbanization. Government initiatives like “Make in India” also support the potential of metal stocks as they align with India’s economic growth. However, before investing, think about your risk tolerance and goals. Be mindful of factors like global economic conditions, supply and demand, government policies, and industry trends when making decisions. You can consider consulting a registered stock market advisor for better sector insights.
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
FAQ
Which is the top metal stock?
As per the market capitalization of each company, the top metal stock in India is JSW Steel Limited.
What are metal indices?
Metal indices track and reflect the performance of metal sector companies in India. The index for the Indian market is NIFTY Metal.
Which metal is good to buy?
When talking about the metal companies, you can consider investing in one or a few of the top metals stocks of the NSE. But, when talking about non-ferrous metals like gold, palladium and silver, you can invest in the commodity directly depending on your financial profile and investment objective.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
