Top Metal Stocks: List of Best Metal Industry Shares to Buy in 2024

India has a long-standing history of metal mining and production, as the industry plays a vital role in the country’s economy. As a fast-developing country that aims to become a 5-trillion economy in the next few years, the Iron and Steel industry contributes 2% of GDP and its weight in the Index of Industrial Production (IIP) is 6.2%. Being one of the biggest contributors to India’s GDP, the mining and metal industries are fundamental to the Prime Minister’s goal of making India an Aatmanirbhar Bharat. Thus, the industry has seen significant growth over the years & fluctuation in ferro alloys share prices, making top steel stocks in india and metal stocks in India a good investment opportunity for those interested in the Indian stock market.

In this blog, we’ll look closer at the metal stocks in India and what makes them a worthy investment.

What are Metal Stocks in India?

Metal stocks refer to the stocks of companies involved in the exploration, production,  processing or distribution of metals such as steel, aluminum, copper, zinc, and others. In India, several metal sector stocks are listed on major stock exchanges- the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

These metal sector shares may operate mines, smelters, refineries, or other facilities involved in the extraction and processing of metals. The best metal stocks in India can provide exposure to the performance of the metal industries, and investors often use them to gain exposure to commodities without having to own and store the metal physically.

Top 10 Metal Stocks in India

Here is the metal sector stocks list consisting of the best metal stocks in India based on the market capitalization in the share market.

Stock Name	Sub-Sector	Market Cap (in Cr)	Share Price	PE Ratio
Tata Steel Ltd	Metals & Mining	₹2,04,292	₹163.4	-61.09
Hindustan Zinc Ltd	Metals & Mining	₹1,38,738	₹337.85	16.71
JSW Steel Ltd	Metals & Mining	₹2,11,648	₹862.5	18.94
NMDC Ltd	Metals & Mining	₹63,799	₹216.8	9.92
Hindalco Industries Ltd	Metals & Mining	₹1,28,964	₹577.75	13.73
Jindal Steel And Power Ltd	Metals & Mining	₹90,693	₹903.35	16.59
Steel Authority of India Ltd	Metals & Mining	₹61,214	₹145.95	19.75
National Aluminium Co Ltd	Metals & Mining	₹32,095	₹175.35	21.59
Vedanta Ltd	Metals & Mining	₹1,10,999	₹309.95	23.36
Jindal Stainless Ltd	Metals & Mining	₹58,739	₹707.25	19.72

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on the top metal companies in India in the list is from 4th April 2024.  However, for real-time updates on stock prices and market trends, visit the smallcase stocks collection today!

Best Metal Stocks – Overview

Let’s have a look at the top metal stocks in India:

Tata Steel Ltd

Tata Steel, previously known as Tata Iron and Steel Company Limited (TISCO), stands as one of the world’s leading steel manufacturers. Headquartered in Mumbai, Maharashtra, it boasts a global presence, operating in nearly 50 countries with an annual crude steel capacity of 34 million tonnes (MTs). Tata Steel caters to various sectors including construction, engineering, automotive, packaging, consumer goods, power, aerospace, rail, and defense. It holds the eighth position on the Fortune India 500 list, firmly establishing itself as one of India’s top 500 companies. It is one of the best steel companies on our list!

Hindustan Zinc Ltd

An Indian mining company that was founded in 1966. The company produces zinc, lead, and silver and operates in India. Additionally, HZL is India’s only and the world’s largest integrated producer of Zinc-Lead. It is a subsidiary of Vedanta Limited.

JSW Steel Ltd

JSW Steel, a part of the JSW Group, operates across various sectors including energy, infrastructure, and cement. The JSW Group generates a significant revenue of $23 billion. In 1982, the JSW Group entered the steel industry through the acquisition of Piramal Steel Limited, laying the groundwork for the emergence of JSW Steel. This move facilitated the establishment of Jindal Vijayanagar Steel Limited (JVSL) in 1994, enhancing production capacity and strengthening JSW’s presence in the Indian steel market. It is also one of the best steel stocks in India on our list. 

NMDC Ltd

National Mineral Development Corporation (NMDC), a prominent PSU in India and a Navratna enterprise under the Ministry of Steel, holds the distinction of being the country’s largest iron ore producer. NMDC operates mines in Karnataka and Chhattisgarh, while also extracting diamonds from its Majhgawan mine in Panna, Madhya Pradesh, a project it acquired in 1966.

Hindalco Industries Ltd

A leading aluminum and copper producer with a diverse product range. They manufacture a variety of aluminum products, including rolled products, extrusions, and foil. Additionally, the company produces copper products, such as copper cathodes and continuous cast copper rods, catering to industries like automotive, packaging, and electrical.

Jindal Steel And Power Ltd

Jindal Steel and Power Limited (JSPL) ranks among India’s leading steel producers and holds significant positions in power, mining, and infrastructure sectors. As part of the diverse OP Jindal Group, JSPL operates manufacturing facilities in Raigarh (Chhattisgarh), Angul (Odisha), and Patratu (Jharkhand).

Steel Authority of India Ltd

Steel Authority of India Limited (SAIL), a prominent player in India’s steel industry, stands as one of the largest steel-making companies and holds the prestigious status of being a maharatna among the nation’s central public sector enterprises. SAIL produces and markets a diverse array of steel products including hot and cold rolled sheets and coils, galvanized sheets, electrical sheets, structural components, railway products, plates, bars, rods, stainless steel, and various alloy steels. It is also one of the best steel stocks to buy in India on our list. 

National Aluminium Co Ltd

Established on January 7, 1981, in Bhubaneswar, Odisha, the National Aluminium Company Limited (NALCO) is primarily owned by the Government of India, holding a 51.28% stake. NALCO operates an aluminum smelter with a capacity of 4.60 lakh tonnes per annum (TPA) and a 1200 MW captive power plant in Angul, Odisha. Additionally, it manages a 68.25 lakh TPA bauxite mine and a 21 lakh TPA alumina refinery in Damanjodi, Koraput district.

Vedanta Ltd

Vedanta Ltd is a diversified natural resources company, offering a range of products and services in mining, oil and gas exploration, and metal production. Thus, their product portfolio includes aluminum, zinc, copper, iron ore, and oil, with a focus on sustainable and responsible resource development.

Jindal Stainless Ltd

Jindal Stainless Limited (JSL) holds the title of India’s largest stainless steel producer and is a prominent player in the global stainless steel industry. Founded by OP Jindal in 1970, JSL manufactures a wide range of stainless steel products, including slabs, coils, plates, sheets, precision strips, and ferro alloys. Initially established as Jindal Strips Limited, the company commenced operations with a mini steel plant in Hisar, Haryana, laying the groundwork for both Jindal Stainless Limited and the diversified conglomerate, OP Jindal Group.

Metal Industry in India 

India is home to a rich variety of minerals, making it one of the top producers of metals in the world. 

The country is the third-largest producer of steel, with a capacity of 142.3 million tonnes per annum (MTPA). It is also the fourth-largest producer of aluminium, with a capacity of 4.1 MTPA.

The metal industry in India is divided into two categories, namely ferrous and non-ferrous metals. Ferrous metals include iron and steel, while non-ferrous metals include copper, zinc, lead, and aluminium, among others. The industry has been a crucial contributor to the Indian economy, generating employment and revenue for the country. Thus, you can keep a keen eye on ferrous alloy share prices of the top metal industries to make your investment decision.

What is the Nifty Metal Index?

The Metal Nifty or Nifty Metal Index is a stock market index. It represents the performance of metal and mining companies listed on the National Stock Exchange (NSE) in India. Therefore, it is one of the sectoral indices created and maintained by the NSE.

Historically, this index has been volatile since its launch in 2004. Then the base value of the index was 1000. After several crests and troughs, in keeping with the market conditions, this index has seen recovery. From its pandemic-induced low of 1778 in March ’20, it currently holds a value of 3500. The Nifty Metal Index comprises 15 companies. These companies involved in producing and distributing metals such as steel, aluminium, copper, zinc, and others. The index is calculated using the free-float market capitalization method. This method considers the shares available for trading in the market are not held by promoters, governments, or other strategic investors. Additionally, global commodity prices, demand and supply dynamics, government policies, and economic conditions can all influence the performance of the Nifty Metal Index. Thus, by investing in nifty metal stocks, you can track the index’s performance and invest in exchange-traded funds (ETFs).

How to Identify Mining Stocks in India?

Identifying promising mining stocks in India requires careful analysis, particularly using financial ratios to understand their financial health and growth potential. Here’s how you can utilize financial ratios for evaluation especially for large and mid cap metal or iron ore stocks in India:

• Return on Equity (ROE): Measures the company’s profitability relative to shareholder investment. Aim for a healthy ROE (>15%) to indicate efficient use of capital.
• Debt-to-Equity Ratio (D/E): Evaluates the company’s leverage. Lower ratios (<1) indicate strong financial health and less risk.
• Current Ratio: Assesses the company’s ability to meet short-term obligations. Thus, ratios exceeding 1.5 imply good liquidity.

• Gross Profit Margin: Shows the percentage of revenue remaining after direct costs. Therefore, higher margins (>20%) signify efficient operations and pricing power.
• Operating Cash Flow to Debt Ratio (OCF/Debt): Indicates the company’s ability to cover debt with its cash flow from operations. Higher ratios (>1) reflect lower risk.
• Price-to-Book Ratio (P/B): Compares the stock price to its book value per share. Lower ratios (<2) suggest potential undervaluation.

How to Invest in Metal Sector Stocks?

Investing in metals gives you a few options. You can buy individual stocks of metal-related companies, like mining or manufacturing firms, for a direct stake in their performance. If you prefer diversification, there are ETFs and mutual funds tailored to the metal sector news. 

These spread your risk across multiple companies. Therefore, for those feeling a bit more adventurous, there’s the option to dabble in commodity futures or options contracts tied to metal prices. And if you like having something tangible, consider buying physical precious metals like gold or silver coins. They can act as a hedge against economic uncertainty. Your choice depends on your investment goals and how much risk you’re comfortable with.

How to Invest in the Metal Sector Through smallcase?

We understand how daunting the task of selecting the best metal companies can be. Luckily, you don’t need to select and track individual metal companies to understand how the metal industry market is working. Yes, it’s possible with Metal Tracker smallcase. 

The Metal Tracker smallcase by Windmill Capital is a smallcase that includes companies primarily engaged in aluminium, copper, manganese, iron & steel. These companies are pre-packaged and monitored by SEBI-registered professionals, who conduct detailed research, so you don’t have to. Through smallcase, you can invest in companies with strong environmental, social, and governance (ESG) practices. The list doesn’t end here. At smallcase, you can diversify your portfolio by doing portfolio metal investing. This means you can invest in several companies at the same time to mitigate risks and enjoy favourable returns.

Metal Tracker smallcase by Windmill Capital

Factors to Consider Before Investing in Metal Shares

Investing in the metal share list of metal stocks India can be profitable, but checking metal share prices every time isn’t enough. There are several other factors you should consider. Here are some key factors to consider before investing in metal shares:

• Global Economic Conditions: Global economic conditions significantly impact metal prices. Economic growth can lead to increased demand for metals, while economic downturns can lead to a decrease in demand, affecting the prices of metals stocks list.
• Supply and Demand Dynamics: The supply and demand dynamics of the metal market India can play a critical role in determining the prices of metal company stocks. Supply shortages or excess supply can significantly impact the prices of metals.
• Government Policies and Regulations: Government policies and regulations can significantly impact the metal market India. Changes in rules or policies related to trade, taxes, or environmental issues can affect the production and prices of metal stocks.
• Industry-Specific Factors: Factors specific to the metal industry, such as technological advancements, production costs, and labour issues, can impact the profitability and prices of metal stocks. Investors should stay informed about these industry-specific factors to make informed investment decisions.

Characteristic Features of Metal Stocks in India

Metal stocks in India exhibit several unique traits that distinguish them within the investment landscape. These features include:

• Cyclical Nature: Metal stocks are inherently cyclical, often experiencing fluctuations in demand and prices due to economic cycles, global demand trends, and geopolitical events.
• Raw Material Dependency: Metal stocks depend highly on the availability and cost of raw materials such as iron ore, aluminium, copper, and zinc. Any disruptions in the supply chain can impact metal companies’ profitability.
• Global Market Dynamics: Metal stocks are influenced by global market dynamics, including commodity prices, trade policies, and currency exchange rates. Shifts in these factors can affect the performance of metal stocks in India.
• Infrastructure Demand: Metal stocks’ performance is closely linked to infrastructure development and construction activities in India. Increased government spending on infrastructure projects can boost metal demand, benefiting metal companies.
• Technological Advancements: Metal stocks are affected by technological advancements in mining, processing, and manufacturing. Companies investing in innovative technologies may gain a competitive edge in the industry.

Why Invest in Metal Stocks in India?

Investing in the best metal stocks in India can be appealing due to the country’s robust industrial and infrastructural development, which propels demand for metals. With a growing economy and increasing urbanization, metals like steel and aluminum play vital roles in construction and manufacturing. Additionally, the government’s emphasis on initiatives such as “Make in India” further augments the potential for metal stocks news as they align with the nation’s economic growth trajectory. However, potential investors should conduct thorough research and consider market dynamics before making any investment decisions.

Who Should Invest in Metal Stocks in India?

Investing in the metal sector shares in India can be suitable for a range of investors, but it may be particularly appealing to long-term investors, risk-tolerant Investors, portfolio diversifiers, Commodity Investors and other active traders. However, one must consider their risk appetite and investment goals before investing.

Benefits of Investing in Metal Stocks List in India

There are multiple benefits of investing in metal industries in India; thus, let’s have a look at some metal stocks prominent ones: 

• Diversification of Portfolio: Practicing portfolio investing in metal stocks can help in portfolio diversification. Thus, metal stocks in India can provide an opportunity to invest in different asset classes and help reduce the portfolio’s overall risk.
• Potential for Long-Term Growth: Metals are essential raw materials used in various industries such as construction, manufacturing, and transportation. Thus, the demand for metal stocks in India is expected to increase in the long term.
• Hedge Against Inflation: Metal stocks in India can act as a hedge against inflation. When inflation rises, the prices of metals also tend to rise, as well, which metals can help protect the value of your portfolio.
• High Dividend Yields: Metal stocks often offer high dividend yields. This can provide you with a regular income stream and be particularly attractive for income-seeking investors.

Risks of Investing in Metal Stocks in India

There can be several risks associated with metal stock investments in the Indian stock market. Let’s take a look at a few for now:

• Market Volatility: Metal stocks are highly sensitive to market fluctuations, including changes in commodity prices, global demand, and geopolitical factors. This volatility can lead to significant fluctuations in stock prices, posing risks to investors.
• Cyclical Nature: The metal industry is cyclical, with periods of boom and bust driven by factors such as economic cycles, supply-demand dynamics, and technological advancements. During downturns, metal stocks may experience prolonged periods of underperformance, impacting investor returns.
• Regulatory Risks: Metal companies are subject to various regulations and government policies, including environmental regulations, trade policies, and taxation. Changes in regulations can significantly impact the operations and profitability of metal companies, leading to risks for investors.
• Operational Risks: Metal companies face operational risks related to production, logistics, and supply chain management. Issues such as labor strikes, equipment failures, and supply chain disruptions can affect production levels and profitability, impacting stock performance.
• Financial Risks: Metal companies often carry significant debt levels to finance capital-intensive projects such as mine expansions and infrastructure upgrades. High debt levels can increase financial risk, especially during periods of economic downturn or rising interest rates.

Consider Mitigating Challenges with Metal Tracker smallcase

Here, we have listed two primary challenges of investing in top metal stocks in India. 

• Picking Out Individual Metal Companies: Investing in the top metal companies in India require a careful selection of individual companies. Therefore, it is advisable to conduct thorough research and analysis to identify companies with strong financials, sound management, and a competitive position in the market. It can be challenging for investors to pick out the best metal stocks to buy in the highly competitive metal business.
• Volatility and Fluctuations in Metal Prices: One of the biggest challenges of investing in metal companies India is the volatility and price fluctuations. The prices of metals can be highly volatile and fluctuate due to various factors. Such as changes in demand and supply, global economic conditions, geopolitical factors, and currency fluctuations. Thus, these price fluctuations can significantly impact the profitability of metal companies.

To Wrap It Up…

To conclude, the future of metal stocks in India looks promising. Investing in metal sector stocks or nifty metal index can offer significant potential for long-term growth, portfolio diversification, and protection against inflation. However, it is important to consider factors such as global economic conditions, supply and demand dynamics, government policies and regulations, and industry-specific factors before making investment decisions.

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