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Metal index soars nearly 3% led by JSPL, SAIL, Tata Steel; here's why
Shares of metal companies mainly steel were in demand as the Nifty Metal index surged nearly 3 per cent on the National Stock Exchange (NSE) in Monday's intra-day trade on hopes of improvement in earnings, and further increase in capex.
At 12:37 PM; Nifty Metal index, the top gainer among sectoral indices, was up 2.6 per cent, as compared to 0.57 per cent rise in Nifty 50.
Tata Steel, Jindal Steel and Power (JSPL) and Steel Authority of India (SAIL) rallied 4 per cent on the NSE. NMDC, Jindal Stainless (JSL), JSW Steel, Hindalco Industries, Vedanta and National Aluminium Company were up in the range of 2 per cent to 3 per cent.
What's driving steel companies' share price today?
Domestic steel demand is growing at a rapid pace, over 8 per cent annually. This demand is driven by infrastructure projects, affordable housing, railways, ports, highways, growth in automotive, defense and renewable energy sectors. As of mid-2025, the global steel market is growing slowly with total demand expected to rise by just 1.7 per cent globally according to the World Steel Association (WSA).
'The Indian government's multipronged strategy aims to counter global disruptions with domestic strength. Capex is the growth engine for our country, and we are expecting capex to increase further. It will result in sustaining long-term growth, promoting infrastructure-led investment and job creation in the country,' SAIL, the state-owned company, said in the Q1FY26 earnings conference call.
Foreign trade push, the recently signaled India-UK FTA is expected to unlock opportunities for start-up companies, manufacturing and services exports without compromising India's strategic interest.
However, rising imports means steel imports surged over 24 per cent in 2025, especially from China, Vietnam and Japan, creating price pressure on domestic producers; however, imports in Q1FY26 of this year are under control. The prices of steel have also been operating in a narrow band, but with the prices stabilizing in the past 1 or 2 weeks right now. There are hopes for improvement in the next quarters, which has traditionally remained the strongest for steel producers, SAIL said.
Meanwhile, broader global growth concerns are likely to weigh on commodity prices, in general. Financial markets remain vulnerable to potential risk-aversion episodes in this macro backdrop, besides continuing geopolitical risks. However, in case of a significant dilution in trade frictions through trade deals resulting out of the ongoing bilateral negotiations by the US administration, the global economic outlook could get re-rated upwards, JSW Steel said in its FY25 annual report.
CRISIL (March 2025 forecast) has projected India's steel consumption growth to remain robust at 9-10 per cent in FY 2025-26 with flat steel products (projected growth of 12-14 per cent) leading the demand growth, in comparison to long steel products (projected growth of 5.5-7.5 per cent). While India's domestic steel demand growth scenario continues to be robust, trade-related developments need to be watched, the company said.
ICICI Securities view on Tata Steel, Vedanta
Analysts at ICICI Securities hold a positive view on Tata Steel supported by strategic capacity expansion in India and multiple profitability improvement levers across Indian and Europe operations, driven by ongoing cost optimization. The brokerage firm has BUY rating on Tata Steel with a target price of ₹200 per share.
With healthy capacity expansion across divisions, market leadership in the aluminium and zinc segments, controlled leverage on balance sheet, return ratios >20 per cent & attractive dividend yield of ~9 per cent, analysts at ICICI Securities retained BUY rating on Vedanta with SOTP based revised target price of ₹530.
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