Metal stocks continued their strong run on Thursday, February 26, with the Nifty Metal index emerging as the second-best performing sectoral index in February. The index has gained nearly 5% so far this month, showing sustained buying interest across the metals and mining space.
Among the key constituents, Tata Steel, Adani Enterprises, Jindal Steel, and Lloyds Metals and Energy have rallied between 9% and 16% during the month. Meanwhile, shares of SAIL and Vedanta have risen between 7% and 8%. On Wednesday, the Nifty Metal index was the top sectoral gainer, closing 2.7% higher, with all constituents in the green, led by Lloyds Metals and Vedanta.
The rally has been supported by a weaker US Dollar Index, hopes of no significant demand destruction, and expectations of rising aluminium and copper demand.
The ongoing quarter ending March 31 is expected to bring margin expansion for steel companies compared to the same quarter last year, as per the reports. These hikes are protected by safeguard duties, offering pricing support. Additionally, the seasonally strong period is expected to lift steel demand further.
Shares of Lloyds Metals & Energy Ltd surged over 2% on Thursday and 16% on month to date basis. The positive outlook is underpinned by the company’s transition into an integrated steel producer with a diversified revenue base, which is expected to drive meaningful upside over the medium term.
The company is developing fully integrated steel facilities at Ghughus and Konsari, with plans to transform the Gadchiroli–Chandrapur belt into a steel hub in western India. Profitability is likely to improve meaningfully as Lloyds leverages its access to low-cost iron ore, increases its focus on value-added steel products, and benefits from operating efficiencies arising from vertical integration.
A key competitive advantage for Lloyds Metals & Energy is its long-term access to high-grade, low-cost iron ore from the Surjagarh mine, secured until 2057 without any auction premium. Surjagarh is Maharashtra’s only iron ore mine and has around 157 million tonnes of extractable reserves and 701 million tonnes of branded hematite quartzite (BHQ).
The low silica and alumina profile of the ore supports structural cost advantages and margin expansion.
The company has acquired a 50% stake in Nexus Holdco FZCO, providing exposure to copper and multi-mineral assets in the Democratic Republic of Congo.
Steel and non-ferrous players showed margin resilience through operational efficiencies and favourable product mix, while mining companies faced volume and cost pressures. The near-term earnings trajectory will depend on realisation trends, raw material costs and domestic demand momentum.
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