The Nifty Metal pack has emerged as the best-performing sector of the year 2026, supported by a strong rise in metal prices and subsequently robust earnings growth reported by the companies.
“Ferrous steel prices have risen over 25 per cent since Dec’25, driven by the implementation of safeguard duties, inventory restocking, and improving market sentiment. Meanwhile, non-ferrous players have benefited from a sustained rally in LME aluminium, copper, and zinc prices over the past year, underpinned by robust demand from structural themes such as electrification, EV adoption, renewable energy, and data centre expansion,” he highlighted.
In Q1FY27, pricing strength drove an earnings recovery across the metals pack. YES Securities said higher domestic steel realisations helped Indian steel producers recover profitability despite seasonal volume weakness, while favourable metal prices and cost efficiencies supported non-ferrous earnings.
Bucking the trend
Hindustan Zinc has lost 3 per cent Y-T-D and Jindal Stainless 16 per cent, according to ACE Equity data. However, 13 of the 15 index constituents remain in the green, with Welspun Corp gaining the most, up 188 per cent.
Hindustan Zinc
Harshal Dasani, business head at INVasset PMS, highlighted that zinc is the weakest link in the base-metals complex, weighed down by a persistent Chinese production surplus that most forecasts expect to persist into 2027, capping price recovery.
“The stock also carries the Vedanta-group linkage,” Dasani said, adding that it trades partly on parent sentiment and dividend-upstreaming expectations rather than purely on operating performance.
Jindal Stainless
Jindal Stainless faces a different set of challenges. Dasani said stainless steel competes with cheap imports, while the company lacks the upstream integration of carbon-steel majors. This leaves it squeezed between weak realisations due to imports and rising nickel and ferrochrome costs.
While an antidumping investigation by the DGTR is underway, the pending outcome continues to limit margin expansion, said Vinit Bolinjkar, head of research at Ventura Securities.
The company also flagged the impact of natural gas shortages and a sharp rise in propane and LPG prices on the operations at the Odisha plant in the initial weeks of April, resulting in capacity rationalisation and near-term concerns on volumes and costs.
Can these stocks rebound?
Bolinjkar said Hindustan Zinc’s industry-leading cost position and strong silver by-product provide a resilient floor. With LME zinc at supportive levels, silver price stabilisation and resolution of government stake-sale overhangs could trigger a structural re-rating.
As for Jindal Stainless, he finds near-term operational disruptions as transient, with production normalising across H2 FY27. Management’s 7–9 per cent volume growth guidance for FY27 remains intact. A sustained re-rating, however, depends on the DGTR concluding its anti-dumping probe in favour of domestic producers.
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