India Metals & Mining Aluminium sell-off overdone; remain Buy on HNDL, NALCO; flat steel margins strong

Research evidence excerpt

India Metals & Mining Aluminium sell-off overdone; remain Buy on HNDL, NALCO; flat steel margins strong

3 July 2026

India Metals & Mining EquitiesMetals & Mining

Aluminium sell-off overdone; remain Buy on HNDL,

NALCO; flat steel margins strong India

◆ We view the fall in LME Aluminium prices as excessive given Pinakin Parekh*

physical markets remain in deficit SeniorHSBC SecuritiesAnalyst, Indiaand CapitalMetalsMarketsand Cement(India) Private

Limited

◆ Spot steel spreads have weakened. We expect HRC price pinakin.parekh@hsbc.co.in

+91 22 40891549

increases post festivals. Coking coal remains a key risk

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

◆ Aluminium remains our preferred metal. Top Buys: HNDL, not registered/ qualified pursuant to FINRA regulations

NALCO. We also like TATA, JSW, HZ, Jindal Stainless, all

Buys. Cut TPs on SAIL and Jindal Steel, both rated Hold

Recent correction across Metals equities is driven more by USD/Inflation rather

than any deterioration in fundamentals: Indian M&M equities have corrected 6-20%

over the last month (they outperformed global peers). We view this correction as macro

driven (stronger USD, interest rate increase worries on higher inflation). In commodities,

LME Aluminium prices have declined the most (~17% in last 1 month), which we view as

excessive. The Middle East conflict premium embedded in LME Aluminium prices has

completely faded given the ceasefire. Alumina prices have likely bottomed. We remain

positive on LME Aluminium prices and our top picks are HNDL (Buy, TP INR1,430)

and NALCO (Buy, TP INR480).

Ferrous value chain – seasonal correction in steel prices, but we expect HRC

price increase post rains: Long steel prices have corrected in the last 1 month, which

in our view is seasonal.