Metal Stocks: Buy or avoid Hindalco, Vedanta, Tata Steel? JPMorgan, Motilal Oswal and others weigh in

Metal Stocks: Aluminium and steel stocks are in focus after brokerages, including JPMorgan, CLSA, HSBC, Macquarie and Motilal Oswal highlighted strong earnings outlook and valuation comfort.

Stocks such as Hindalco Industries, Vedanta, Tata Steel and JSW Steel are seen offering upside ranging from about 3 per cent to nearly 37 per cent based on target prices.

Hindalco Industries Share Price Targets

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Aluminium stocks, including Hindalco Industries and Vedanta, have come into focus after global brokerage JPMorgan turned bullish on the sector, citing a strong earnings growth outlook backed by higher aluminium prices and favourable currency trends.

The brokerage said the ongoing Middle East conflict has increased the likelihood of a supply-driven bullish cycle in aluminium. It added that recent smelter outages are expected to persist for months, even after shipping conditions normalise.

JPMorgan noted that current stock prices imply an LME aluminium price of around USD 2,900 per tonne, compared with the spot level of about USD 3,500 per tonne, indicating valuation comfort. It added that commodity tailwinds could also help ease recent debt concerns across companies.

JPMorgan upgraded the stock to “Overweight” from “Neutral” and raised the target price to Rs 1,125 from Rs 875, implying an upside of about 18.6 per cent from the CMP of Rs 948.60.

Macquarie maintained a “Neutral” rating with a target price of Rs 979, implying an upside of about 3.2 per cent.

Vedanta Share Price Targets

JPMorgan upgraded Vedanta to “Overweight” from “Neutral” and raised the target price to Rs 850 from Rs 680. At the CMP of Rs 709.40, the implied upside stands at around 19.8 per cent.

The brokerage said the risk-reward has turned favourable, with FY27 EBITDA estimated at around four times. It added that the strength in aluminium and zinc businesses is likely to offset weakness in oil volumes.

CLSA maintained an “Accumulate” rating with a target price of Rs 835, implying an upside of about 17.7 per cent.

Motilal Oswal Financial Services has a target price of Rs 810, implying an upside of about 14.2 per cent.

Tata Steel Share Price Targets

In the steel space, Jefferies said Tata Steel and JSW Steel have declined 9–10 per cent since the start of the Middle East conflict, despite a 6 per cent rise in domestic steel prices.

The brokerage said FY27-28 earnings estimates are 6–24 per cent ahead of Street expectations and see further upside, supported by improving demand-supply balance in China and still-low Asian conversion spreads.

However, it cautioned that a prolonged war could weigh on demand, although earnings remain more sensitive to price movements.

HSBC maintained a “Buy” rating and raised the target price to Rs 250 from Rs 235, implying an upside of about 28.5 per cent from the CMP of Rs 194.55.

Macquarie maintained an “Outperform” rating with a target price of Rs 222, implying an upside of about 14.1 per cent.

Motilal Oswal Financial Services has a target price of Rs 240, implying an upside of about 23.3 per cent.

JSW Steel Share Price Targets

Jefferies included JSW Steel among stocks that have corrected 9–10 per cent despite a rise in domestic steel prices, while maintaining a positive earnings outlook.

Morgan Stanley said higher iron ore prices could be negative for companies dependent on external ore, including JSW Steel.

Macquarie maintained an “Outperform” rating with a target price of Rs 1,319, implying an upside of about 16.6 per cent from the CMP of Rs 1,131.70.

Motilal Oswal Financial Services has a target price of Rs 1,400, implying an upside of about 23.7 per cent.

Jindal Steel and Power Share Price Targets

Morgan Stanley flagged Jindal Steel and Power among companies that could be impacted by higher iron ore prices due to dependence on external ore.

Macquarie maintained an “Outperform” rating with a target price of Rs 1,193, implying an upside of about 4.3 per cent from the CMP of Rs 1,143.40.

Hindustan Zinc Share Price Target

Motilal Oswal Financial Services has a target price of Rs 720, implying an upside of about 35.7 per cent from the CMP of Rs 530.55.

NMDC Share Price Target

Morgan Stanley said price hikes by NMDC and elevated seaborne prices could impact steel companies dependent on external ore. Motilal Oswal Financial Services has a target price of Rs 100, implying an upside of about 23.1 per cent from the CMP of Rs 81.23.

Steel Authority of India Share Price Target

Motilal Oswal Financial Services has a target price of Rs 175, implying an upside of about 10.1 per cent from the CMP of Rs 158.95.

Jindal Stainless Share Price Target

Motilal Oswal Financial Services has a target price of Rs 990, implying an upside of about 37.6 per cent from the CMP of Rs 719.70.