Metal Stocks Hike Today: A tremendous rise is being seen in metal stocks today. Nifty Metal Index has jumped by almost 2.5% and reached its highest level ever. Many global brokerages have released reports on this sector. These reports shed light on the triggers of the metals sector bullishness and which companies should be considered. After the bullish report of brokerage, metal stocks have gained momentum.
at City Vedanta
Citi says Vedanta’s valuation is attractive at 5.5x attributable EV/EBITDA. The stock has the potential to rise by 15%. Vedanta is likely to get a boost from the demerger. Citi has advised pair trade by maintaining overweight rating on Vedanta and underweight rating on JSW Steel.
CLSA says that valuation rerating is going on in steel companies. Indian HRC prices are up 18% from their December low. Rebar prices have increased further. Jindal Steel is expected to benefit the most from its increased exposure to long steel. CLSA has upgraded the rating of JSW Steel from UNDERPERFORM to HOLD, with a target price of Rs 1,200. Jindal Steel has maintained its HOLD rating with a target price of Rs 1,375. Tata Steel has maintained its HOLD rating with a target price of Rs 220.
Macquarie on metals and mining stocks
Macquarie has a positive bias on ferrous metal stocks. Brokerage says that further increase in steel prices is expected. Domestic demand is expected to remain strong this year, with a growth of 7-8% year-on-year. Steel prices are expected to increase by Rs 1,000-1,500 per tonne in the short term. JSW Steel remains the top pick with buy rating. JSW Steel will benefit from capacity addition, margin improvement and volume growth.
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