Indian metal and commodity stocks are rising irrespective of the muted broader market sentiment. This is perhaps due to global metal prices experiencing strong price rallies on the international exchanges, supply chain constraints, robust demand across domestic infrastructure markets, and better-than-expected corporate earnings.
The Nifty Metal Index delivered a return of 37.28% over the past year, while the broader market indices, such as Nifty Midcap 150 and Nifty smallcap 250, delivered returns of 2.25% and negative 2.15%, respectively. (Source: NSE)
Amongst all metals, aluminum and steel prices seem pivotal to this price rally. Aluminum prices are already near a 4-year high, but as per this report, prices could rise further as China might curb production to reduce industrial emissions, and also as part of its plan to rationalise capacity levels.
As the metal sector rally continues, let’s explore five stocks that have gained the most during the past year.
#1 National Aluminium Company Limited (NALCO): Largest Aluminium & Bauxite Producer
NALCO Ltd., the largest integrated bauxite and alumina producer, is the metal stock that gained the most during the past year. The company’s share price surged 98.12% during the period.
The metals and minerals NALCO primarily deals in include bauxite, alumina hydrate, special hydrates, calcined alumina, coal, and other energy products.
Optimization Benefits
During FY26, NALCO optimally used its production capacity, which helped the company achieve its highest production ever. During the period, bauxite production increased to 7.7 million tonnes per annum (MTPA), rising from 7.26 MPTA in FY25.
Alumina hydrate production also surged from 2.1 MTPA to 2.3 MTPA during the period. Net power generated by NALCO increased from 6,641-million units (MU) to 6,953 MU.
Capacity Expansion
As NALCO has already been operating at its optimal levels, the company is expanding its mining and production capacities. Bauxite mining is expected to surge by around 3.5 MTPA during FY27 as the company has been exploring Pottangi Bauxite Mines, which have an overall bauxite reserve of around 111 million tonnes.
For alumina production, NALCO is building its 5th Stream Alumina Refinery. This is anticipated to increase the alumina production capacity by another 1 MTPA. This project is anticipated to be commissioned in June 2026.
Furthermore, the company is also expanding its power generation capacity. NALCO is setting up another captive power plant with a power production capacity of around 1,080 megawatts. This is expected to be commissioned during June 2031.
Financials and Returns
Sales grew from ₹16,788 crore in FY25 to ₹17,843 crore in FY26, logging a 6.29% YoY growth. Net profit for the period also grew by 10% from ₹5,268 crore to Rs.5,797 crore.
NALCO delivered a return on capital employed (ROCE) of almost 40%, while the industry median is just 13.7%.
NALCO, being a Navaratna Company, offers a regular dividend. The current dividend yield of the company is 2.7%, one of the highest amongst its peers, as the industry median is just 0.13%.
Still trading cheap?
Even after a 98% rally, the stock is trading at a price-earnings (PE) of 11.9x, which is lower than the industry median of 15.6x. Even the price earnings to growth (PEG) ratio is 0.2x, lower than the industry median of 0.43x, indicating that the stock might be relatively cheaper than its peers.
1-Year Share Price Chart of NALCO Ltd.
#2 Hindustan Copper Limited: Monopoly in Copper Mining
Hindustan Copper Ltd. is the next metal stock on this list. The company delivered a return of around 96% over a year.
Hindustan Copper is the only company in the country that is into mining copper and owns all the operating copper ore mining leases in India.
Rise in Production
During FY26, copper metal in concentrate (MIC) production increased to 27,421 tonnes, growing by 9% YoY. It is also the highest production in the past seven years. Copper ore production surged by 6% YoY to 3.67 MTPA during FY26.
Expansion plans
Hindustan Copper is working towards increasing their copper ore mining capacity up to 12.2 MTPA by 2030 and making all the efforts to achieve this target.
Currently, there are different ongoing domestic greenfield projects in Sikkim, Pathargora, Dhobani, and an international greenfield project in Chile.
During the year, the company further initiated another greenfield exploration project at the Bodal Block.
Furthermore, Hindustan Copper is coming up with a paste fill plant at Malanjkhand, which is one of a kind in India. At this plant, large-scale application of paste backfill technology will be used for metal mining for the first time in India.
Financials & Returns
Sales for FY26 stood at ₹3,078 crore, up by 48.6% YoY from ₹2,071 crore in FY25. Profit for the period jumped from ₹469 crore to ₹921 crore, logging a 96.4% YoY growth.
ROCE of the company stood at 42.4%, way above the industry median of 15.5%.
Hindustan Copper pays a regular dividend and has a current dividend yield of 0.3%, while that of the industry is negligible.
Is stock trading cheap?
The stock is trading at a PE of 49.8x, lower than the industry median of 55x; however, the PEG ratio is at 1x, higher than the industry median of 0.6x. This indicates that the stock might not be undervalued if adjusted for growth.
1-Year Share Price Chart of Hindustan Copper Ltd.
#3 Vedanta Limited: India’s Largest Primary Aluminium Producer
Vedanta Ltd. is the next stock from the metal sector, which witnessed an 86.8% rally during the past year. The company has been the largest primary aluminium producer in the country with a market share of around 46%. Vedanta is also one of the largest domestic zinc suppliers in the country, with over 75% of the zinc market share, and also operates one of the world’s largest zinc deposits internationally. However, that’s not all; the company is the third-largest silver producer globally as well.
Operational Efficiency Pushing Production to New Highs
One of the reasons behind Vedanta’s price rally could be its operational efficiencies. The company produced record aluminium at 2,456 kilo tonnes (KT) during FY26. During the period, alumina production surged by 48% YoY to 2,916 KT. The company usefully reduced the cost of production (COP) of aluminium to a 5-year low of US$1,752 per tonne.
Zinc production for FY26 stood at the highest ever for the company at 1,114 KT, growing by 2% YoY, and the company also reduced COP for zinc as well to a 5-year low of US$959 per tonne. At Zinc International, annual zinc mining increased by 27% YoY to 225 KT.
New Discoveries & Expansions
Vedanta invested ₹14,918 crore during FY26 as growth capex, with which the company has been expanding different segments of its business. Capacity expansion has been going on at the Jharsuguda VAP, Lanjigarh Refinery, Balco smelter and VAP, and other places. During the year, Vedanta also discovered gas in the Cairn Ambe Block in the West Coast region.
For FY27, alumina production is anticipated to grow up to 4.1 MTPA, while aluminium production can grow up to 2.7 MTPA. Zinc mined metal production can surge up to 1,160 KT, while silver production is expected to grow up to 690 tonnes.
Financials & Returns
Sales generated during FY26 stood at ₹1,74,075 crore, up from ₹1,50,725 crore in FY25. Profit grew from ₹20,535 crore to ₹25,096 crore during the period.
Even though sales and profits have increased, the ROCE of the company stood at 16.5%, lower than the industry median of 20.2%.
Vedanta maintains a healthy dividend regime, and its current dividend yield, which is 14.05%, is the highest in the industry, as the industry median is just 0.14%.
Is stock trading cheap?
The stock is trading at a PE of 14x, while the industry median is 29.8x, indicating that the stock might be relatively undervalued.
1-Year Share Price Chart of Vedanta Ltd.
#4 Hindalco Industries Limited: World’s Largest Aluminium Recycler
Hindalco Industries Ltd., a part of the Aditya Birla Group, is the fourth stock on this list that has surged 59.18% during the past year.
The company is engaged in aluminium and copper production. Novelis, a subsidiary of Hindalco, is the largest aluminium recycler in the world. During FY26, the company recycled 88% of its production waste, which included aluminium ash, bauxite residue, and copper slag.
Mixed Production during FY26
During FY26, Hindalco witnessed muted production, especially across Aluminium upstream, copper cathodes, and copper rods segments. Aluminium downstream production, however, surged from 411 KT to 458 KT YoY.
Robust Expansion
Hindalco is working towards doubling its aluminium and copper upstream production while increasing the downstream production by 4 times within FY30.
For increasing upstream production, captive coal mines at three different locations are currently at different stages of development. Aditya Alumina Refinery is expected to commission in FY28, with 30% of the construction already completed.
Both phases of Aditya Aluminium Smelter are currently under construction with a target commissioning in FY28. Another copper smelter is also being developed, with expected commissioning in FY29.
For downstream production growth, Aditya FRP has been scaling up its production capacity to reach an optimal level. Similarly, the battery enclosure unit at Chakan has been fully revamped for optimal utilization.
Aditya Battery Foil unit has been commissioned already, while another copper inner grooved tubes unit at Vadodara is currently undergoing trial runs.
Financials & Returns
Sales jumped 15% YoY from ₹2,38,496 crore in FY25 to ₹2,74,944 crore in FY26. Having said that, profit for the period declined by 16% from ₹16,002 crore in FY25 to ₹16,391 crore in FY26. The decrease in profit during the period has been a result of the Novelis Oswego Plant fire incident and the cost incurred for recoveries.
ROCE of Hindalco is at par with the industry median of 13.7%, and the current dividend yield is 0.49%, higher than the industry median of 0.13%.
Is Hindalco still cheap?
The stock is trading at a PE of 13.1x, lower than the industry median of 15.7x. However, the PEG ratio is 0.65x, higher than the industry median of 0.43x, suggesting that if adjusted for growth, the stock might be relatively overvalued.
1-Year Share Price Chart of Hindalco Industries Ltd.
#5 Welspun Corp Limited: Leading Large-Diameter Pipes Manufacturer
Welspun Corp Ltd., one of the largest manufacturers of large-diameter line pipes, is the next metal stock that gained around 54.9% during the past year.
The company manufactures iron and steel products, which include large-diameter line pipes, ductile iron pipes, stainless steel bars, stainless steel pipes, and TMT bars.
Apart from the domestic market, Welspun is a leading supplier of these products in the US and KSA markets as well, especially for large-diameter pipes. Soon, Welspun is launching its ductile Iron pipes range in the KSA region.
Apart from these, the company acquired the iconic brand – Sintex, which offers water storage tanks and plastic pipes.
Robust Stainless Steel Bars Demand
During FY26, demand for stainless steel bars rose significantly. This is indicated by the sales of these bars growing by 44% during the fiscal year, rising from 18.9 KT in FY25 to 27.2 KT in FY26.
Having said that, the other segments of the business also witnessed fair growth in their sales. Ductile pipes’ sales grew by 26% from 272 KT to 342 KT during the period, followed by line pipes sales (both in India and the US), which grew by 12% from 851 KT in FY25 to 954 KT in FY26. Sales of stainless steel pipes also grew by 9% during the period.
The only segment that saw sluggish demand during the year was TMT bars. Sales for this segment declined by 12% from 211 KT in FY25 to 185 KT in FY26.
Robust Expansion Projects
The company has been investing heavily in different expansion projects. For FY26, they raised their capex investment to ₹2,532 crore, up from ₹853 crore invested during FY25.
As per the management, the capacity expansion projects in the US and India are expected to be commissioned in the fiscal year 2027.
Financials and Returns
Sales grew from ₹13,978 crore in FY25 to ₹16,770 crore in FY26, logging a 20% YoY growth. However, profit for the period declined by 15% from ₹1,908 crore in FY25 to ₹1,613 crore in FY26.
ROCE of the company stood at 22.9%, higher than the industry median of 13.3%.
The company also offers regular dividends, and the current dividend yield is 0.4%, compared to the industry median, which is negligible.
Is Welspun trading at a premium?
The stock is trading at a PE of 22.9x, slightly higher than the industry median of 21.9x. However, the PEG ratio is at 0.2x, lower than the industry median of 0.7x, indicating that if adjusted for growth, the stock might be relatively cheaper than its peers.
1-Year Share Price Chart of Welspun Corp Ltd.
Final Thoughts
Indian metal companies are benefiting from the current metal and overall commodity sector rally driven by higher metal prices, timely execution of capacity expansion projects, solid global demand, a strong business environment, revival of the infrastructure sector, and improving operational efficiencies as well.
Having said that, the future performance of these companies will depend on sustained demand, successful commissioning of the expansion projects, and commodity price trends. Thus, it would be wise to add these stocks to your watchlist for now to track them and the overall sector performance.
We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information.
Disclaimer:
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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