The brokerage firm Jefferies has maintained a positive outlook on India’s metal sector, reiterating its ‘Buy’ rating on Hindalco and Tata Steel while keeping a ‘Hold’ on JSW Steel. The firm has revised its target prices, setting Hindalco at Rs 800, Tata Steel at Rs 180, and JSW Steel at Rs 920.
According to the brokerage, metal stocks have outperformed the Nifty 50 by 15% to 20% this year, driven by a mix of factors such as hopes of a recovery in China, expectations of safeguard duties on Indian steel, and strong aluminum prices. The brokerage highlighted that “Indian steel prices are up 5% from the December trough, and any safeguard duty can provide further support, boosting margins and valuations.”
Jefferies on Metals: China’s role in the Metal rally
The brokerage report pointed to signs of an economic recovery in China, which is a major influence on global metal prices. Manufacturing PMI in China rose above 50 in February 2025, indicating expansion. In addition to this, property sales in China have shown an uptick after consistent declines since mid-2021.
The brokerage noted that “China’s residential property market might have bottomed last quarter as secondary home prices continue to improve.”
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Global aluminum prices have gained 7% year-to-date, outperforming steel, which has seen a 3% decline in China.
The brokerage remains bullish on Hindalco, stating that India’s aluminum business is delivering strong results, while global aluminum prices remain stable. The firm also noted “Novelis margin concerns are alleviating,”.
Jefferies on Metals: Can Indian steel prices get a boost
The brokerage sees potential for further price increases if the Indian government imposes safeguard duties on Chinese steel importscc- a move already adopted by Vietnam and South Korea. Jefferies currently factors in steel prices of Rs 51,000 to Rs 52,500 per tonne for FY26-FY27, slightly above current levels.
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The report also noted the sensitivity of steel prices to company earnings, stating that a Rs 1,000 increase per tonne could boost EBITDA for Tata Steel and JSW Steel by 7% and 9%,
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