9 Nifty Metal stocks including Vedanta, NALCO, SAIL gained 20%-50% in 2024; check full list

Metal stocks have emerged as a popular choice on Dalal Street in 2024, driven by the sustained increase in base metal prices, optimistic forecasts from analysts regarding metal companies, and robust business updates in the fourth quarter. These factors collectively have boosted investor confidence.

In the previous trading session, the Nifty Metal index jumped 2.9% to hit a new all-time high of 9,158 points. This increase has contributed to a total return of 14.60% for the calendar year 2024. Remarkably, this marks the fifth consecutive year of growth for Indian metal stocks.

This year, 9 out of 15 constituents of the Nifty Metal index have shown impressive returns, ranging between 20% and 50%, with Vedanta leading as the top gainer. Starting the year at ₹258.55 per share, Vedanta's stock has surged to the current price of ₹383.45, marking a return of nearly 50%.

Currently, the stock is trading at its 24-month high. Recently, global brokerage firm CLSA upgraded Vedanta's stock by two notches from "underperform" to "buy," anticipating the company to benefit from the ongoing surge in metal prices. 

Also Read: Vedanta targets $7.5 bn in earnings in 2 years, deleverage group by $3 bn

CLSA also revised its target price for the stock to ₹390, making it the second-highest target after Nuvama's ₹394. 

Similarly, shares of NALCO have been on a remarkable journey, surging by 23.24% this month alone. The surge follows NALCO's report earlier this month, announcing its highest-ever metal sales, cast metal production, and bauxite excavation in fiscal 2024. For the calendar year 2024, NALCO's stock witnessed a 43% increase.

SAIL, another PSU firm, has seen robust performance in 2024, driven by record annual production and sales in FY24. The increasing demand for steel amid a global manufacturing recovery and ongoing capital expenditure growth in India has further bolstered stock prices. 

So far this year, SAIL's stock has surged from ₹123.65 per share to ₹164.65, yielding a return of 33.15%.

Also Read: Hindustan Zinc needs strong prices to show its mettle in FY25

Hindustan Zinc shares have surged by 48% between April 1 and April 12 amid a strong rise in zinc and lead prices. This surge is expected to improve company margins, as the relatively stable production costs juxtaposed with increased selling prices result in higher profits per unit sold.

Moreover, the sharp rally in silver prices to multi-year highs has further boosted the company's shares. So far this year, the stock has yielded a return of nearly 29%.

Other stocks, such as MOIL, Jindal Steel, Tata Steel, NMDC, and Coal India, have all yielded returns in the range of 20% to 25%. 

Base metals boom

Base metals like Copper, Aluminum, Zinc, Lead, and Nickel resumed their upward trajectory this week after a brief pause. This resurgence was fueled by expectations of rate cuts from the Fed, increased business activity in major economies such as India, and growing concerns about the supply shortage. 

In India, business activity surged at its fastest pace in 14 years, with the flash composite purchasing managers index for April reaching 62.2, surpassing economists' expectations. 

Also Read: Metals: Rebound in global manufacturing activity pushes prices high

Similarly, Eurozone private sector activity experienced significant growth in March, the most in 11 months, with Germany's Composite PMI rising to 50.5 from 47.7 in the previous month, surpassing market expectations. Japan and Australia also reported growth in business activity in the previous month.

The ban on metals from Russia, a major global supplier of nickel and aluminum, by Washington and London has raised concerns about potential disruptions to global supply chains.

Conversely, some of the world's largest energy trading companies are re-entering the metals market after facing challenges in the past. Vitol Group, Gunvor Group, and Mercuria Energy Group are expanding their metals teams, aiming to invest capital generated from record profits, Bloomberg reported. 

On the supply side, Cobre Panama, one of the world’s largest open-pit copper mines, was forced to stop operations in December, leading to a deficit in the global supply of copper concentrate this year. 

Also Read: Hindustan Copper shares spike over 8% as metal price nears $10,000

While nickel prices climbed to multi-month highs this week, market talks about the Chinese government's plans to buy the metal for state stockpiles triggered concerns about tight supply, as per recent media reports.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.