Best Metal Stocks in September 2024 – Based on 5yr CAGR

Metals are foundational to modern infrastructure, and India stands out in this sector as a leading global player. The country is the 2nd largest producer of aluminium and 4th largest of iron ore. With the Indian government’s focus on extensive infrastructure development, spanning roads, railways, and airports, the steel demand is anticipated to grow by around 10%. 

India has set ambitious targets to reach a crude steel capacity of 300 million tonnes per annum and a production demand of 255 MTPA by 2030-31. As the country aims to become self-reliant in speciality steel production, it seeks to enhance its position within the global steel value chain, competing with advanced steel-making nations like Korea and Japan. 

This growing demand in the residential and commercial building sectors further underscores the promising outlook for iron and steel. In this article, check the best metal sector stocks in India in September 2024, based on the 5yr CAGR. 

Best Metal Stocks in September 2024 – Based on 5yr CAGR

Note: The best metal stocks list provided here is as of September 10, 2024. The stocks are selected from the Nifty 500 universe and sorted by 5yr CAGR.

Overview of 5 Best Metal Stocks in India

1. Jai Balaji Industries Ltd

Jai Balaji Industries Ltd is one of the leading private steel manufacturers in Eastern India, operating 8 integrated steel units across West Bengal, Chhattisgarh, Orissa, and Jharkhand. The company boasts a diverse portfolio of value-added products, including DRI (sponge iron), pig iron, ferro alloys, alloy and mild steel billets, reinforcement steel TMT bars, wire rods, ductile iron pipes, and alloy and mild steel heavy rounds. In FY 2024, the company’s total income was ₹6,629 crore, up from ₹6,161 crore in FY 2023. The Profit After Tax (PAT) for the year ended March 31, 2024, was ₹880 crore, compared to ₹58 crore in FY 2023. 

Key metrics: 

• Return on capital employed (ROCE): 55.91%
• Return on equity (ROE): 85.39%

2. Godawari Power and Ispat Ltd

Godawari Power and Ispat is primarily involved in the business of mining iron ore and manufacturing iron ore pellets, steel billets, wire rods, H.B. Wire, sponge iron, and ferro alloys, as well as generating electricity. In FY 2024, the company’s total revenue was ₹5,55,328.31 lakh, compared to ₹5,85,710.47 lakh in FY 2023. The profit for the year ended March 31, 2024, was ₹93,558.42 lakh, compared to ₹79,336.02 lakh in FY 2023.

Key metrics: 

• ROCE: 27.41%
• ROE: 22.01%

3. Jindal Stainless Ltd

Jindal Stainless offers high-quality stainless steel in India and is known as the market leader. In FY 2024, the company’s total income was ₹38,731.59 crore, compared to ₹35,823.32 crore in FY 2023. The profit for the year ended March 31, 2024, was ₹2,693.48 crore, compared to ₹2,083.83 crore in FY 2023.

Key metrics: 

• ROCE: 20.01%
• ROE: 20.60%

4. Usha Martin Ltd

Usha Martin Ltd is mainly involved in the manufacturing and sale of steel wires, wire ropes, strands, cords and related products. The company is also engaged in the sale of other products, such as wire drawing and allied machines. In FY 2024, the company’s total income was ₹3,26,548 lakh, compared to ₹3,29,582 lakh in FY 2023. The profit for the year ended March 31, 2024, was ₹42,412 lakh, compared to ₹35,060 lakh in FY 2023.

Key metrics: 

• ROCE: 21.29%
• ROE: 19.19%

5. Jindal Steel And Power Ltd

Jindal Steel and Power (JSP) is one of India’s leading steel manufacturers, with a significant presence in steel, power, mining and infrastructure. In FY 2024, the company’s net revenue was ₹50,183 crore, compared to ₹52,768 crore in FY 2023. The profit for the year ended March 31, 2024, was ₹5,943 crore, compared to ₹3,193 crore in FY 2023.

Key metrics: 

• ROCE: 12.02%
• ROE: 14.18%

Metal Sector in India

India’s pursuit of self-reliance in speciality steel aims to elevate its position in the global steel value chain, aligning it with advanced steel-making nations like Korea and Japan.

Under the PLI Scheme for Specialty Steel, 57 Memorandums of Understanding (MoUs) have been signed with 27 companies, bringing in investments of $3.55 billion (₹29,500 crores). This initiative is set to create an additional 25 million tonnes of steel capacity and generate 17,000 jobs by FY 2027-28. By December 2023, companies had already invested $1.55 billion (₹12,900 crores) in the scheme.

In April FY25, India’s crude steel production was 1.838 million tonnes, while finished steel output reached 11.215 million tonnes. As of FY22, India had 901 steel plants producing crude steel. From April to January FY24, crude steel production totalled 118.372 million tonnes, and finished steel production reached 113.848 million tonnes. 

In April-January FY 2024, Steel Authority of India Limited (SAIL) produced 16.97 million tonnes of hot metal, 15.94 million tonnes of crude steel, and 15.30 million tonnes of saleable steel. Additionally, India’s aluminium production stood at 3.47 million tonnes during the same period, contributing about 5.8% to the global primary aluminium production of 59.562 million tonnes.

Conclusion

Apart from these, there are several other top metal stocks in India. Before investing in any stock understand the business of the company, their financial growth and future prospects. Talk to a financial advisor before investing. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.