Top Metal Stocks in India
Have you heard of the Iron Pillar in Delhi, India? If yes, then you know it signifies the caliber of the metallurgists in ancient India. of The metal industry in India is one of the oldest industries in the country with a rich history spanning centuries. India produces as many as 95 minerals which give it a good base for the metals and mining industry in the country. With the increasing push for infrastructure and development in the country, another industry that is set to benefit is the metal industry. So let us check out the top stocks in this industry in terms of market capitalization and a few related details of the sector as a whole.
The top metal stocks in terms of market capitalisation and their details are given below.
JSW Steel is the largest metal company in India, with headquarters in Mumbai. They make and trade iron and steel products and plan to increase their crude steel capacity to 45MnTPA within the next decade. In 2021, they acquired Bhushan Power & Steel Limited, making them the largest steel producer in India with a production capacity of 12MnTPA. Their massive production capacity emphasises their commitment to meeting India’s steel demand.
The key details of the company are tabled below. Figures as of August 18th, 2023
| Category | Details |
| Market Capitalization | Rs. 1,90,296 crores |
| PE Ratio | 33.76 |
| Return on Equity | 9.21% |
| Debt Equity Ratio | 0.94% |
| Promotor’s Holdings | 45.40% |
| Share price | Rs. 786.90 |
| Dividend yield | 0.43% |
The trailing returns of JSW Steel Limited are tabled below
| Period | Trailing Returns |
| 1 year | 16.98% |
| 3 years | 42.91% |
| 5 years | 18.69% |
| 10 years | 32.07% |
Tata Steel Limited, established in 1907, is one of the top jewels in the Tata Group and the company and holds the distinction of being Asia’s pioneer integrated private steel enterprise. The company has its footprint in the entire value chain of steel manufacturing from mining to processing iron ore and coal to producing and distributing finished products. The company has a target to increase domestic steel-making capacity to 30 MnTPA by 2025. The comprehensive approach of the company not only ensures the precision and reliability of the end products but also speaks to Tata Steel’s commitment to delivering excellence at every stage of the manufacturing process. The expansion plan signifies Tata Steel’s resilience and adaptability as well as solidifies its position as a pivotal player in the ever-evolving global steel industry.
The key details of the company are tabled below. Figures as of August 18th, 2023
| Category | Details |
| Market Capitalization | Rs. 1,40,608 crores |
| PE Ratio | 87.04 |
| Return on Equity | 0.85% |
| Debt Equity Ratio | 0.50% |
| Promotor’s Holdings | 33.90% |
| Share price | Rs. 115.10 |
| Dividend yield | 3.10% |
The trailing returns of Tata Steel Limited are tabled below
| Period | Trailing Returns |
| 1 year | 2.31% |
| 3 years | 39.38% |
| 5 years | 14.69% |
| 10 years | 17.77% |
Founded in 1966, Hindustan Zinc boasts an extensive history of over fifty years as a key player in the realm of zinc-lead mining and smelting. This remarkable tenure underscores the company’s deep-rooted expertise in these domains. The company is a subsidiary of Vedanta Limited with the latter holding 64.9% of Hindustan Zinc Limited and the Government of India holding 29.5%. Hindustan Zinc holds the unique distinction of being India’s sole integrated producer of zinc, lead, and silver. This holistic approach to production showcases the company’s comprehensive capabilities across multiple valuable resources. The company also has the merit of being the most cost-effective zinc producer globally.
The key details of the company are tabled below. Figures as of August 18th, 2023
| Category | Details |
| Market Capitalization | Rs. 1,32,126 crores |
| PE Ratio | 14.14 |
| Return on Equity | 42.45% |
| Debt Equity Ratio | 0.12% |
| Promotor’s Holdings | 64.92% |
| Share price | Rs. 312.90 |
| Dividend yield | 24.05% |
The trailing returns of Hindustan Zinc Limited are tabled below
| Period | Trailing returns |
| 1 year | 9.56% |
| 3 years | 10.82% |
| 5 years | 2.44% |
| 10 years | 11.94% |
This company was founded in 1958 and is the crown jewel of the Aditya Birla Group. The company and its subsidiaries are primarily engaged in the production of Aluminium and Copper. However, the company’s scope extends beyond this to include crafting aluminium sheets, extrusions, and light gauge offerings. These crafted products serve as indispensable components within diverse packaging sectors, finding their utility in segments such as beverages and food, manufacturing of can and foil products, etc.
The key details of the company are tabled below. Figures as of August 18th, 2023
| Category | Details |
| Market Capitalization | Rs. 99,069 crores |
| PE Ratio | 11.91 |
| Return on Equity | 9..07% |
| Debt Equity Ratio | 0.54% |
| Promotor’s Holdings | 34.64% |
| Share price | Rs. 440.20 |
| Dividend yield | 0.67% |
The trailing returns of Hindalco Industries Limited are tabled below
| Period | Trailing Returns |
| 1 year | 0.28% |
| 3 years | 31.74% |
| 5 years | 14.91% |
| 10 years | 16.75% |
Vedanta Ltd functions as a diversified natural resource conglomerate, actively engaged in the exploration, extraction, and processing of minerals and oil & gas. Their operational scope covers the exploration, production, and marketing of a wide spectrum of valuable resources, including zinc, lead, silver, copper, aluminium, iron ore, and oil & gas. This conglomerate’s reach extends across various regions like India, South Africa, Namibia, Ireland, Liberia, and the UAE. Vedanta Ltd has diversified into various sectors, such as commercial power generation, steel manufacturing, port operations in India, and global involvement in advanced glass substrate production in South Korea and Taiwan. At present, the majority of total revenues, approximately 65%, are derived from India, with subsequent contributions coming from Malaysia (9%), China (3%), the UAE (1%), and the remaining portion (22%) originating from other sources.
The key details of the company are tabled below. Figures as of August 18th, 2023
| Category | Details |
| Market Capitalization | Rs. 86,778 crores |
| PE Ratio | 9.89 |
| Return on Equity | 26.10% |
| Debt Equity Ratio | 1.10% |
| Promotor’s Holdings | 68.11% |
| Share price | Rs. 233.35 |
| Dividend yield | 43.38% |
The trailing returns of Vedanta Limited are tabled below
| Period | Trailing Returns |
| 1 year | -12.37% |
| 3 years | 22.38% |
| 5 years | 1.63% |
| 10 years | 6.00% |
The Nifty Metal Index is a vital gauge of the Indian stock market’s metal sector performance. Comprising major metal companies listed on the National Stock Exchange (NSE), this index provides investors and analysts with insights into the dynamics of metal industries, including steel, mining, and non-ferrous metals. Fluctuations in global commodity prices, infrastructural developments, and industrial trends influence the index’s movement. As the backbone of various industries, the Nifty Metal Index serves as a barometer for economic growth and infrastructure expansion in India. There are 15 companies that comprise the Nifty Metal Index.
The metal industry is quite diverse and is spread across many segments like metals, mining, non-ferrous metals, ferrous metals, and more. The various details of this sector are mentioned below.
India has abundant reserves of metallic minerals such as bauxite, chromites, and iron ore, and mineral fuels like coal and lignite. It is almost self-sufficient in terms of resources and has the potential to significantly impact GDP growth and foreign exchange earnings. The expansion is driven by increased infrastructure development, automotive production, and support from power and cement industries. India is globally ranked fourth in iron ore production with an output of 204.48 million tones in FY21. Crude steel production reached 125.32 million tones in FY23 with finished steel and consumption of finished steel surpassing pre-COVID levels.
The government has taken many initiatives for the metal industry in order to attract investments in the metal industry from the private as well as public sector.
India’s Iron and Steel industry holds immense significance, contributing around 2% to the nation’s GDP, and positioning India as the world’s second-largest steel producer. This industry is further strengthened by the ‘Make in India’ initiative of the government which bolsters the manufacturing sector in the country.
Among the government initiatives, the National Mineral Policy, endorsed in February 2019, has enhanced regulation, transparency, sustainable mining practices, and a balanced socio-economic growth approach. This policy extends industry status to mining activities and stimulates private-sector investment. The country’s abundant mineral resources position the metal sector to be a key player in India’s goals of self-reliance and achieving a USD 5 trillion economy by 2024-25, but the emphasis on the need for cost reduction through technology and efficient practices cannot be ignored.
The metal industry in India is growing at a rapid pace and the companies belonging to this sector are set to see significant growth as well. With the increasing demand for infrastructure and the capital outlay allocated by the government in Budget 2023, the metal industry could see a drastic rise in demand. Therefore, it might be a good time to consider including quality metal stocks in your investment portfolio. But as always, it is important to see if the investment fits within your risk profile and your financial goals.
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