Jefferies has revised its target prices for key metal stocks, signaling a cautiously optimistic stance on the sector. The brokerage increased Tata Steel’s target price to Rs 180 from Rs 165 and JSW Steel’s to Rs 920 from Rs 850, though it maintained a ‘Hold’ rating on the latter. Hindalco’s target price was kept steady at Rs 800.
The brokerage highlighted that India’s steel prices have rebounded by 4 per cent since their December lows. Additionally, the expectation of a safeguard duty could further enhance profitability by improving margins. While Jefferies acknowledged that steel valuations appear expensive, it believes they are likely to hold, as Asian steel spreads remain 20 per cent below their long-term averages, leaving room for potential expansion.
Aluminium prices hold up, Hindalco remains steady
Jefferies noted that aluminium prices are showing resilience, bolstering Hindalco’s prospects. At 1.1 times its estimated FY26 book value, Hindalco’s valuation appears reasonable, especially given its expected 13 per cent return on equity (ROE). The brokerage underscored that a recovery in China and the likelihood of protective tariffs in India have fueled investor confidence, with metals stocks outperforming the Nifty by 15-20 per cent year-to-date.
Goldman Sachs’ outlook on Indian equities
Meanwhile, Goldman Sachs has taken a broader view on Indian equities, noting that the country’s stock market remains a compelling destination for global investors. The firm highlighted India’s macroeconomic stability, policy continuity, and strong corporate earnings as key drivers. While valuations are above historical averages, Goldman Sachs believes that a combination of structural reforms and sustained growth will continue to attract capital inflows.
The brokerage firm also mentioned that sectors such as manufacturing, financial services, and technology are set to benefit the most from India’s growth trajectory. However, it warned that global headwinds, such as monetary policy shifts and geopolitical uncertainties, could impact short-term sentiment.
With Jefferies optimistic about metals and Goldman Sachs maintaining a positive stance on Indian equities, the market appears poised for selective growth, with investors closely tracking global and domestic cues.
