PL Capital has issued a bullish outlook for the metals and mining sector as investors prepare for Q4 FY26 earnings. The research notes that key sectors are poised for significant growth, driven by global supply disruptions and robust domestic infrastructural demand in India.
The brokerage expects the overall metals coverage universe to demonstrate strong performance. Forecasts point to Year-on-Year revenue, EBITDA, and PAT growth of 15%, 23%, and 64% respectively. This anticipated momentum is set to provide a strong tailwind for Indian industrial commodities stocks.
Factors Fueling Metals Sector Optimism
The strong performance forecast is underpinned by multiple global and domestic catalysts. Steel prices, for instance, began firming up in mid-December. This upward trend was supported by rising coking coal costs and strong domestic infrastructure demand across India.Globally, the combination of safeguard extensions and lower Chinese exports further benefited steel pricing. Similarly, aluminium gains are being driven by disruptions originating in the Middle East. These varied geopolitical and demand-side factors provide comprehensive support to the metals and mining value chain.
Steel Sector Set for Double-Digit Volume Growth
The steel segment is expected to show particularly strong momentum. PL Capital anticipates double-digit volume growth for both Tata Steel and Jindal Steel. Furthermore, JSW Steel and Steel Authority of India are projected to see mid-single digit volume growth.This anticipated growth is fueled by resilient domestic demand and improved government spending plans. Experts noted that the steady rise in hot rolled coil prices, despite contractual volume restrictions, contributes positively to the market outlook.
Improving Financial Metrics and Spreads
A key indicator of this sector strength is the anticipated increase in financial metrics. The brokerage expects the average net sales realisation to increase by approximately 8% Quarter-on-Quarter (QoQ).The spreads for the sector also show remarkable improvement. Spreads moved north of Rs 27k/t toward the end of March '26. Moreover, the average spread for Q4 rose 24% QoQ to Rs 22k/t. This positive trend is expected to drive an EBITDA/tonne increase of roughly Rs 2.2k/t QoQ, translating into robust earnings growth for listed entities.
Core Mining and Aluminium Outlook
Beyond the major steel players, PL Capital has highlighted the importance of raw material inputs. The report notes that while coking coal prices remained volatile, the overall market structure benefits from increased costs associated with war-related disruptions.The mining and metals portfolio, which includes stocks like NMDC Ltd. and Hindalco, is expected to benefit significantly from these structural improvements. The forecast suggests a generally positive outlook across the entire industrial metals value chain as earnings season approaches.
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