HSBC has initiated coverage on India’s metals and mining sector with a broadly constructive view, citing improving medium-term fundamentals and an easing of global drags that have hurt earnings in recent years. The brokerage said it expects several of the operational and financial setbacks faced by global subsidiaries—particularly Novelis— to fade from FY27, creating a more favourable backdrop for domestic producers.
HSBC initiated buy ratings on Hindalco (₹980 target) and Nalco (₹291 target), stating that both companies are positioned to benefit from stabilising aluminium markets and rising long-term demand. The brokerage added that Novelis’ challenges have weighed on sentiment, but expects these pressures to gradually normalise over the next two years, improving Hindalco’s earnings trajectory. On Nalco, HSBC highlighted the company’s strong leverage to aluminium prices and an improving cost position.
The brokerage also initiated a buy on Tata Steel with a target of ₹215, saying losses in its European business have likely peaked and should begin to fade as restructuring actions progress. However, HSBC struck a more cautious tone on Hindustan Zinc, initiating a hold rating with a target of ₹470, noting that while its exposure to silver and zinc is attractive, valuations remain rich.
In the ferrous space, HSBC initiated reduce ratings on SAIL (₹114 target) and NMDC (₹59 target), citing muted profitability and rising capital expenditure that could weigh on near-term returns. Coal India was initiated at hold with a target of ₹374 as the brokerage sees limited scope for significant upside at current valuations.
Disclaimer: The views above are those of HSBC. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
