Hindalco, APL Apollo are Axis Securities' top metals & mining stock picks; here's why

Brokerage firm Axis Securities has zeroed in on its top conviction bets in the metals & mining pack after the sector delivered a strong operational show in Q2FY26. The firm has issued ‘Buy’ calls on steel pipes major APL Apollo Tubes and aluminium heavyweight Hindalco, citing resilient performance despite a choppy macro backdrop.

Axis Securities noted that the industry posted solid operational performances amidst volatile macro environment in its latest quarterly review.

APL Apollo Tubes

Axis Securities has pegged a target price of Rs 2,100 for APL Apollo Tubes, riding on the company’s record-breaking quarterly performance.

APL Apollo reported its highest-ever quarterly sales volume at 855 kt in Q2FY26, achieving this despite weak macro and extended monsoon. The strong volume momentum helped lift EBITDA per tonne to Rs 5,228, an 8 per cent beat versus street expectations. 

According to the brokerage, the earnings strength was supported by better gross margins, operating leverage benefits, and the absence of ESOP-related expenses that had impacted the previous quarter.

Axis Securities remains upbeat on the company’s growth outlook, backed by the management’s confidence in delivering double-digit CAGR volume growth over the next 3-4 years. Capacity expansion remains central to this push, with APL Apollo aiming to scale up total capacity from 4.5 MTPA to 6.8 MTPA by FY28 as it taps into the virgin East Indian market and selective high-margin global markets. The longer-term roadmap targets a 10 MTPA capacity milestone by FY30.

Hindalco

For Hindalco, Axis Securities has maintained a ‘Buy’ rating with a target price of Rs 880, following a strong operating print in Q2FY26, led by its domestic performance. The brokerage said Indian operations stood robust, offsetting Novelis's muted profitability.

Its bullish stance is reinforced by a list of expansion projects lined up for the future. Key additions slated for commissioning by FY28 include the Aditya alumina refinery, a Phase I aluminium smelter, and a copper recycling plant. A Phase II expansion at Aditya Aluminum is also in the pipeline and expected by FY29.

On the Novelis front, the brokerage flagged a sharp rise in the capex for the Bay Minette facility in the US — revised upward by 22 per cent to $5 billion from $4.1 billion. The escalation has pulled down the project IRR from mid-teens to higher single digits, though management remains confident that returns will remain better than the cost of capital.

Hindalco is also stepping up investments in its copper vertical, with a 300 ktpa brownfield smelter set to come online in Gujarat by FY29, it said.

Axis Securities remains cautious on near-term steel fundamentals, cautioning that spreads are "Likely to Remain Muted in Q3FY26". Domestic HRC prices continue to trade at a steep 12 per cent discount to landed Chinese prices, and India stayed a net importer of steel between April and October 2025.

The aluminium market, however, appears more resilient. LME prices strengthened through Q2FY26 amid resilient demand from packaging and electrical sectors. The global primary aluminium market is projected to remain in a marginal deficit in CY25, offering support to prices, Axis Securities said.