HSBC picks 3 metal stocks, sees up to 32% upside

Metal Stocks: HSBC has turned bullish on select metal stocks, citing strong demand trends, tight supply conditions and a favourable medium-term outlook for key commodities. The brokerage sees upside of up to 32 per cent in three stocks from the metals space, led by Hindalco Industries.

The positive view comes as the Nifty Metal index remains among the better-performing sectoral indices in calendar year 2026, supported by record silver prices, firm aluminium rates and expectations of a fresh capex cycle.

Hindalco offers highest upside

Add Zee Business as a Preferred Source

HSBC has maintained a Buy rating on Hindalco Industries and raised its target price to Rs 1,240 from Rs 1,060. At the current market price of around Rs 934, the brokerage sees an upside of nearly 33 per cent, the highest among its metal stock picks.

The brokerage expects Hindalco to benefit from firm aluminium prices and improving demand from sectors such as electric vehicles and energy storage systems.

Hindustan Zinc upgraded

HSBC upgraded Hindustan Zinc to Buy from Hold and raised its target price sharply to Rs 750 from Rs 520. With the stock trading around Rs 637, this implies an upside of about 18 per cent.

The brokerage remains positive on silver, which continues to trade at record highs. Silver contributes close to 38 per cent of Hindustan Zinc’s EBIT, making it a key earnings driver for the company.

NALCO remains a Buy

For National Aluminium Company (NALCO), HSBC maintained its Buy rating and raised the target price to Rs 420 from Rs 373. From the current market price of around Rs 361, the stock has an upside potential of over 16 per cent.

NALCO has been the best performer on the Nifty Metal index so far in 2026, supported by aluminium prices hitting their highest levels in more than three years.

Why HSBC likes metals

HSBC expects strong demand from electric vehicles, energy storage systems and the broader energy transition theme. The brokerage also flagged a lack of investments in recent years, which has slowed supply growth.

It added that supply caps and disruptions could further tighten the market, potentially leading to a ‘super cycle’ in select metals. According to HSBC, copper, aluminium, battery raw materials and platinum group metals are likely to be the key beneficiaries, while bulk commodities may continue to lag.