Tata Steel, SAIL, HZL, Hindalco: Muted Q2 likely; here are target prices
JM Financial has 'Buy' rating on Tata Steel with a target of Rs 185. It also has 'Buy' on JSW Steel (target price: Rs 1,280) and Jindal Steel (target price: Rs 1,200) and 'Sell on SAIL (target price: Rs 94).
Amit Mudgill
- Sep 12, 2025,
- Updated Sep 15, 2025 12:28 PM IST
Metal companies are expected to post a soft performance in Q2FY26, weighed down by weaker realisations and seasonally muted demand, JM Financial said in its earnings preview. Within the metals pack, JM Financial’s top pick is Jindal Steel due to its lowest leverage and strongest volume growth outlook. The domestic brokerage also likes Hindalco Industries due to its non-ferrous exposure, and Tata Steel.
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In the case of steel, average domestic HRC (Hot Rolled Coil) prices fell to Rs 49,600 per tonne in the quarter, down about Rs 2,000 sequentially, while Long steel dropped sharply to Rs 48,600 per tonne, a decline of nearly Rs 7,000. Consumption also eased, with JPC data showing a marginal 1 per cent MoM fall in July 2025.
JM Financial said some relief is expected from lower input costs, as coking coal consumption cost declined by $5–10 per tonne, in line with company guidance.
JM Financial has 'Buy' rating on Tata Steel with a target of Rs 185. It also has 'Buy' on JSW Steel (target price: Rs 1,280) and Jindal Steel (target price: Rs 1,200) and 'Sell on SAIL (target price: Rs 94). The brokerage suggested 'Buy' on Hindalco with a target of Rs 800. JM Financial suggested a target of Rs 550 for Hindustan Zinc (Buy) and Rs 75 on NMDC (Hold).
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For the ongoing quarter, NMDC has also cut prices by Rs 500 per tonne in July before hiking them by Rs 400 in August. Even so, JM Financial estimates Ebitda per tonne contraction of around Rs 3,500 for Indian ferrous players in Q2.
Chinese exports, up 10% YoY at 77.5 million tonnes in CY25 YTD, remain an overhang on global prices, though India’s safeguard duty of 12% has provided some protection. Looking ahead, JM Financial expects spreads to improve in the second half, supported by firmer China HRC prices, government action to plug duty loopholes, and seasonal demand recovery.
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On the non-ferrous side, margins are likely to expand, aided by firmer LME prices. Average aluminium prices rose to USD 2,600 per tonne in Q2, up USD 140 QoQ, while zinc prices also trended higher, which should support Hindustan Zinc.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Metal companies are expected to post a soft performance in Q2FY26, weighed down by weaker realisations and seasonally muted demand, JM Financial said in its earnings preview. Within the metals pack, JM Financial’s top pick is Jindal Steel due to its lowest leverage and strongest volume growth outlook. The domestic brokerage also likes Hindalco Industries due to its non-ferrous exposure, and Tata Steel.
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In the case of steel, average domestic HRC (Hot Rolled Coil) prices fell to Rs 49,600 per tonne in the quarter, down about Rs 2,000 sequentially, while Long steel dropped sharply to Rs 48,600 per tonne, a decline of nearly Rs 7,000. Consumption also eased, with JPC data showing a marginal 1 per cent MoM fall in July 2025.
JM Financial said some relief is expected from lower input costs, as coking coal consumption cost declined by $5–10 per tonne, in line with company guidance.
JM Financial has 'Buy' rating on Tata Steel with a target of Rs 185. It also has 'Buy' on JSW Steel (target price: Rs 1,280) and Jindal Steel (target price: Rs 1,200) and 'Sell on SAIL (target price: Rs 94). The brokerage suggested 'Buy' on Hindalco with a target of Rs 800. JM Financial suggested a target of Rs 550 for Hindustan Zinc (Buy) and Rs 75 on NMDC (Hold).
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For the ongoing quarter, NMDC has also cut prices by Rs 500 per tonne in July before hiking them by Rs 400 in August. Even so, JM Financial estimates Ebitda per tonne contraction of around Rs 3,500 for Indian ferrous players in Q2.
Chinese exports, up 10% YoY at 77.5 million tonnes in CY25 YTD, remain an overhang on global prices, though India’s safeguard duty of 12% has provided some protection. Looking ahead, JM Financial expects spreads to improve in the second half, supported by firmer China HRC prices, government action to plug duty loopholes, and seasonal demand recovery.
Advertisement
On the non-ferrous side, margins are likely to expand, aided by firmer LME prices. Average aluminium prices rose to USD 2,600 per tonne in Q2, up USD 140 QoQ, while zinc prices also trended higher, which should support Hindustan Zinc.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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