What are metals stocks?
Metals stocks are stocks of those companies that are involved in the mining, processing and distribution of metals such as iron, steel, gold, copper, aluminium etc.
Metals sector in India: brief overview
The contribution by the mining sector to the GDP of India is around 2% – the government plans to slowly increase it to 2.5% by 2030 by PLI or production-linked incentive schemes. With growing industrialisation and increased expenditure in infrastructure, the total production of steel and other metals is increasing every year.
The performance of the metals stocks in India overall is measured by the Nifty Metal for NSE and BSE metal for BSE which in the past 12 months have increased by 18.87% and 3.76% respectively. The industry P/E ratio of metal stocks in India is 10.91.
However, the metals industry in India still faces major problems which are the following:
- Lower labour productivity due to lack of technology
- Power shortage and shortage of other infrastructure.
- Lower quality of metals such as steel – leads to lower sales, especially exports
Most importantly, there is not much spike in innovation in technology or management in the mining industry in general (compared to say, the IT or electronics industry), making the metals stocks stagnant or falling in value. In fact, the values of metals stocks depend a lot on overall industrial activities in the economy and beyond. Of course that is not the case with all the metals stocks, as we shall soon see in the next segment.
List of best metals stocks in India
The following is a list of the major metals stocks in India:
|S.No.||Name of the company||Increase in price in the last one year|
|3||Tata Steel Ltd||-13.70%|
|5||Jindal Steel and Power||35.60%|
|6||Steel Authority of India||-29.04%|
|8||APL Apollo tubes||19.20%|
|9||National Aluminium co.||-25.52%|
JSW Steel Ltd. is a holding company that focuses on the production and distribution of iron and steel products such as sheets, coils, plates, galvanised and galvalume products (that involves other metals such as aluminium, zinc, silicon etc). JSW Vishwas, JSW Platina and JSW Neosteel are some of its major brands of galvalume, tin plates and TMT bars.
Market Cap: ₹1,70,249 cr
P/E Ratio (TTM): 22.69
Revenue (FY22): ₹1,46,371 cr
Profit (FY22): ₹20,665 cr
It is a company that is engaged in mining, smelting, refining and processing of zinc, lead, silver and others. It also has investments in thermal, solar and wind energy.
Market Cap: ₹1,37,006 cr
P/E Ratio (TTM): 12.03
Revenue (FY22): ₹29,440 cr
Profit (FY22): ₹9629 cr
Tata Steel Ltd.
It is one of the oldest and the most prestigious companies in India, being founded in 1907. It focuses on manufacturing of steel and steel products such as coils, sheets, tubes, wires, galvanised iron etc. Some of its major brands include Tata Agrico, Tata Astram, Tata bearings etc.
Market Cap: ₹1,29,299 cr
P/E Ratio (TTM): 4.51
Revenue (FY22): ₹2,43,959 cr
Profit (FY22): ₹40,154 cr
Hindalco Industries Ltd.
The company focuses largely on aluminium production and distribution through its various brands such as Novelis Inc (for international operations), Utkal Alumina International Ltd. (UAIL), Hindalco Almex Aluminium Ltd. (HAAL), Suvas Holdings Ltd. and Minerals and Minerals Ltd. It also has other branches that produce copper products (cathodes, rods etc.), acids, gold, silver etc.
Market Cap: ₹98,646 cr
P/E Ratio (TTM): 7.08
Revenue (FY22): ₹1,95,059 cr
Profit (FY22): ₹13,730 cr
Jindal Steel and Power
The company focuses on manufacture of steel and iron products such as castings, pellets etc for sectors such as aviation, machinery and real estate. It also has a power generation segment composed of power plants and projects.
Market Cap: ₹ 51,734 cr
P/E Ratio (TTM): 13.10
Revenue (FY22): ₹51,068 cr
Profit (FY22): ₹ 5,753 cr
Steel Authority of India
It is one of the largest Central Public Sector Enterprises of the early post-independence era. It has some of the major steel plants in India under its wing such as Bhilai, Durgapur, Rourkela, Bokaro etc. Its manufactures a diverse range of steel products such as pig iron, TMT, pipes, rods, plates, wheels and axles, electrical steel etc. It has a rather high dividend yield of 10.15% in the past 12 months.
Market Cap: ₹33,767 cr
P/E Ratio (TTM): 7.53
Revenue (FY22): ₹1,03,477 cr
Profit (FY22): ₹12,243 cr
The company has a diversified portfolio of aluminium, copper, zinc, lead, silver, iron ore, oil and gas as well as thermal power plants. Cairn Energy Hydrocarbons Ltd., Sesa Mining Corporation Ltd., Copper Mines of Tasmania Pty Ltd. are some of its subsidiaries.
Market Cap: ₹1,13,977 cr
P/E Ratio (TTM): 7.09
Revenue (FY22): ₹1,32,732 cr
Profit (FY22): ₹18,802 cr
APL Apollo Tubes
It is a comparatively niche company that specialises in steel tube manufacturing. Its various categories of steel tubes are processed and distributed through its many brands such as Apollo DFT, Apollo Fabritech, Apollo Agri, Apollo Green and many others.
Market Cap: ₹30,287 cr
P/E Ratio (TTM): 52.82
Revenue (FY22): ₹13,063 cr
Profit (FY22): ₹619 cr
National Aluminium Co.
It is an India-based company that is focused on manufacturing and marketing of aluminium and related chemicals. It also has captive thermal power plants close to its aluminium smelting plants.
Market Cap: ₹13,839 cr
P/E Ratio (TTM): 5.45
Revenue (FY22): ₹14,181 cr
Profit (FY22): ₹2,951 cr
Coal India Ltd.
It is a central public sector undertaking under the Ministry of Coal. Unlike other stocks above, this is not a metal producing company. However, one must recognise that it produces coking coal which is an essential input in the production of iron and steel. This, along with the sheer size and history of the company allows it to earn a place in the list of best metals stocks in India.
It also produces thermal-grade coal for power generation as well as cement, fertiliser, ceramics, paper, glass and brick manufacturing.
Market Cap: ₹1,43,222 cr
P/E Ratio (TTM): 5.48
Revenue (FY22): ₹1,09,714 cr
Profit (FY22): ₹17,358 cr
The above metals stocks are a mixed bag when it comes to their stock market returns. Therefore, be very careful when choosing to buy any of them – even though all of the above have been making profits, many of them have seen their stock prices drop. If you are interested in buying a share of any of the above companies, open demat account and start investing today!
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations.