Nifty Metal rises 1.5% as Macquarie, Morgan Stanley boost target prices for key players in sector

The price aim for Jindal Steel and Power's share was hiked to 1,170 from Rs 1,070. Tata Steel, too, saw its target price hiked to Rs 171 from Rs 162.

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26 Aug, 2025 12:21

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The Nifty Metal index snapped a three-day losing run and rose 1.5 percent driven by gains in JSW Steel, Tata Steel, and Hindalco. This uptick followed target price increases for several key players in the sector by both Macquarie and Morgan Stanley, boosting investor confidence. Macquarie issued an optimistic outlook on metal stocks, citing resilient domestic fundamentals and easing input costs as key drivers for the sector.

At 10.40 AM, all 15 constituents of the metal index were up 0.3-4 percent. JSW Steel was the top gainer in the metal index as well as the Nifty 50 pack, rising over 4 percent and hitting an all-time high of Rs 988.

Macquarie upgraded JSW Steel to 'Outperform' and hiked the target prices for Coal India, Jindal Steel & Power (JSPL), and Tata Steel. In addition to upgrading JSW Steel to 'Outperform', its target price has been raised to Rs 1,077 from Rs 884, reflecting an upside potential of over 13 percent from its previous close.

For JSW Steel and JSPL, Morgan Stanley has adopted an 'Equal-weight' stance while also raising the target prices for both. JSW Steel's target price is now set at Rs 895, up from Rs 815, while JSPL's target has increased to Rs 970 from Rs 885.

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Hindalco also saw its target price increase by Macquarie to Rs 760 from Rs 597, with the brokerage highlighting the company's strength in aluminium, firm alumina prices, and strong demand in downstream packaging. The new target price set by Macquarie for Hindalco indicates an upside potential of around 11 percent from its previous close.

Macquarie retained Coal India's 'Outperform' rating, with a new target price of Rs 541, up from Rs 465, due to its focus on cost control, volume growth, and a 5 percent dividend yield. The price aim for JSPL shares was hiked to 1,170 from Rs 1,070. Tata Steel, too, saw its target price hiked to Rs 171 from Rs 162.

Macquarie said that steel companies are well-positioned to benefit from domestic price premiums to import parity, steady leverage, and easing input costs. The brokerage said in a note that commodity prices could see upside risks over the next 6-12 months.

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Meanwhile, Morgan Stanley shared its updated outlook on the steel sector, offering a cautious perspective amid strong domestic demand but equally robust supply. Morgan Stanley said that despite a strong demand environment, steel stocks have underperformed the broader market this year and are expected to continue this trend, as there are currently no upside triggers for spreads amid unattractive valuations.

The brokerage maintained its 'Underweight' rating on SAIL and Tata Steel, lowering the target price for SAIL to Rs 105 from Rs 110 and keeping Tata Steel's target at Rs 135.

The Nifty Metal index saw most of its constituents fall between 0.2-2.7 percent in the previous session. The index posted negative monthly returns since July.

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