Tata Steel, HindZinc, SAIL, Hindalco, NMDC: Fresh target prices for metal stocks

YES Securities indicates that the non-ferrous sector delivered a robust Q3FY26, with Hindustan Zinc and NALCO emerging as notable beneficiaries of favourable London Metal Exchange (LME) zinc and aluminium prices. According to the brokerage firm, these conditions led to significant margin expansion, bolstered by operating leverage and disciplined cost management.

YES Securities notes that Hindustan Zinc’s performance during the quarter was driven primarily by the positive pricing environment. Meanwhile, NALCO’s resilience stemmed from stronger aluminium prices, which helped offset softer alumina realisations. In contrast, Hindalco’s consolidated results reflected divergence, as strong domestic aluminium operations were offset by volume disruptions and margin pressures at Novelis following the Oswego fire incident.

Indian steel and aluminum companies including JSW Steel, Tata Steel, Vedanta, Hindalco and Nalco hogged the spotlight amid the reports that the Trump administration’s plans to roll back tariffs on these metals. Indian players have reacted to Q3 and earnings commentaries, geo-economic developments and commodity price movements, says the global brokerage JP Morgan.

According to YES securities, Hindustan Zinc, Godawari Power & Ispat Ltd (GPIL), National Aluminium Co Ltd (Nalco) and Steel Authority of India Ltd (SAIL) reported a better earnings than its expectations, while Hindalco Industries Ltd, JSW Steel and Tata Steel were in line to its estimates. On the other hand, MOIL and NMDC Ltd missed the estimates, said the domestic broker.

On the steel front, YES Securities observed that Q3FY26 was marked by healthy volume performance across producers such as Tata Steel, JSW Steel, and SAIL. Despite improved domestic demand and dispatches, the sector experienced continued pricing pressures and a sequential rise in coking coal costs, resulting in margin compression.

Price hikes in late December 2025 and January 2026 were seen as an initial sign of recovery, but YES Securities highlighted that margin sustainability into Q4FY26 and FY27 will depend on domestic price stability and coking coal cost trends. For raw material providers, it said a recovery in volumes following monsoon-related disruptions in Q2FY26.

NMDC posted strong volume growth, though elevated operating expenses and weaker pricing limited margin gains. GPIL was affected by pellet plant accidents and lower realisations, while MOIL’s earnings remained stable despite ongoing cost pressures, said the brokerage. It emphasised that the earnings trajectory for miners remains closely tied to the stability of iron ore and manganese prices.

YES Securities identified pricing momentum as the key earnings driver for the non-ferrous sector heading into Q4FY26. The brokerage stated, “Overall, pricing momentum remains the dominant earnings driver for the sector heading into Q4FY26 as the cost profile stabilises.” Company performance is expected to show divergence based on pricing support and operational resilience.

YES Securities has no ‘buy’ tag in the metals. It has an ‘add’ rating on Tata Steel (Target Price: Rs 217) and Hindustan Zinc Ltd (Target Price: Rs 725). It has a ‘neutral’ rating on JSW Steel (Target Price: Rs 1,249), SAIL (Target Price: Rs 157), MOIL Ltd (Target Price: Rs 390), GPIL (Target Price: Rs 273), Hindalco (Target Price: Rs 991) and Nalco (Target Price: Rs 394). NMDC has a ‘reduce’ rating with a target of Rs 78.