Hindalco rallies 5%, Coal India, Vedanta up over 3%; why metal stocks are rising

Following the upbeat brokerage commentary, Hindalco shares, which rose 5 percent during the day, were trading 4.09 percent higher at Rs 607.65 on the NSE at the time of writing.

Global brokerage Jefferies has a ‘buy’ call on Hindalco’s stock and has raised its target price to Rs 700 from Rs 660 per share, which means it sees a 15 percent upside on the stock that was quoted at Rs 607.70 on NSE.

The brokerage has also raised FY23-24 EPS by 5-11 percent on higher aluminium prices. Hindalco should be a beneficiary as the bulk of coal comes from Coal India at below-global prices, Jefferies said.

Coal India shares rose 3.7 percent in intraday trade and were trading at Rs 184.55, up 1.96 percent from their previous close. In the past five days, the stock has increased investors’ wealth by 12.48 percent as against benchmark Nifty which has slipped 2.59 percent during the period.

Hindustan Copper stock also gained 3.2 percent to reach an intraday high of Rs 124.90. At 2 pm, the shares were trading 2.4 percent higher at Rs 123.90 on NSE.

Vinod Nair, Head of Research at Geojit Financial Services, last week said, metal stocks rallied due to an increase in steel prices led by supply constraints in Russia and Ukraine, benefitting Indian steelmakers in the export market.

Gautam Shah, founder & chief strategist at Goldilocks Premium Research is bullish on the metals space.

“If that (metal) index were to get past 6,300, I see another 10 percent upside on the metal index. So that’s one space we like on the long side. IT after a large fall seems to be stabilising at current levels. So, IT could stabilize. It’s probably one place to hide but everything else does not have a good set-up,” he told CNBC-TV18 on Friday.