Last Updated on October 26, 2023 by BFSLTeam BFSLTeam
A share in a metal sector company, which is associated with mining, production and processing of metals like iron, coal, aluminium and steel, is referred to as a metal stocks. Metals are widely used in infrastructure development in India and as an export commodity, so its demand and price is directly linked to domestic consumption and foreign demand.
The metal stocks, however, are not meant for short-term investment purposes; instead, these stocks are long-term investments which can then provide good returns. India has a well-established metal industry as it has huge reserves of various metals. Take for example that India is one of the largest producers of steel with an annual production of nearly 150 million tonnes.
While a long-term investment in metal stocks can be a prudent decision, it is always wise to consider all the pros and cons, potential risks and worse-case scenarios associated with such investments.
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Should You Invest in Metal Stocks in India
Investing in metal stocks in India can prove profitable, considering that India has huge reserves of various metals and the demand for metals has gained momentum as the infrastructure building has resumed within India and also worldwide after the COVID19 pandemic. The aftermath of the pandemic has turned out to be a great boon for the metal sector in India and resultantly there has been a spike in the price of metal stocks.
While metal stocks are prone to market fluctuations and changes in tax regimes, these stocks usually overcome such shocks in the long term. It is for this reason that it is suggested that metal stocks should always be purchased as a long-term investment. You must also always look for the best metal stocks in India to invest your hard-earned money.
Top Metal Stocks in India
If you are interested in making long-term investments in metal stocks in India, here are the top contenders which have performed well in the past.
| Stock Name | Sub-Sector | Latest Price (in October 2023) | 6 months ago (April 2023) | 1 year ago (October 2022) | 5 years ago(October 2018) |
| JSW Steel Limited | Mining | ₹763 | ₹688 | ₹666 | ₹379 |
| Jindal Stainless Limited | Iron/Steel | ₹686 | ₹549 | ₹446 | ₹178 |
| Tata Steels | Iron/Steel | ₹126 | ₹104 | ₹103 | ₹57 |
| Vedanta Limited | Diversified Metals | ₹223 | ₹269 | ₹291 | ₹214 |
| Steel Authority of India | Iron/Steel | ₹89 | ₹82 | ₹81 | ₹66 |
Introduction to Best Metal Stocks in India
Here is a brief introduction of the best metal stock companies in India.
JSW Steel Limited
Founded in 1982, JSW Steel is the flagship of the US$ 23 billion JSW Group, which also has presence in sectors like energy, infrastructure, paints, cement, venture capital and sports. The company has a culturally diverse workforce across India, USA, Europe and Africa while the group directly employs nearly 40,000 people. In July 2023, JSW Steel posted an 11 percent on-year growth in consolidated steel production. Having grown from a single manufacturing unit, JSW Steel now has an annual capacity of 29.7 million tonnes and plans to reach a capacity of 38.5 MT by 2025.
Jindal Stainless Limited
Jindal Stainless is one of India’s largest stainless steel manufacturers and was founded in 1970. It boasts an annual melt capacity of 3 MT and an annual turnover of USD 4.30 billion as of March 2023. Jindal Stainless has two manufacturing complexes in Haryana and Odisha, and an overseas unit in Indonesia that serves the South-East Asian markets. It has a worldwide network in 15 countries and one service centre in Spain. Jindal Stainless has integrated operations from mining to the manufacturing of finished products.
Tata Steel
Tata Steel is part of India’s reputed Tata Group, which was founded in 1907. The company has an annual crude steel capacity of 34 million tonnes per annum (MnTPA) and is one of the world’s most geographically diversified steel producers. Tata Steel runs fully integrated operations from mining to the manufacturing and marketing of finished products. Tata Steel, along with its subsidiaries and joint ventures, is spread across five continents with an employee base of over 65,000. It recorded a consolidated turnover of ₹1,56,294 crore in the financial year ending March 31, 2021.
Vedanta Limited
Vedanta was founded in 1979 and is headquartered in Mumbai. It has overseas operations in South Africa, Namibia and Liberia.Vedanta is a diverse company with interest in oil and gas, aluminium, iron ore, copper, steel, nickel, glass, zinc-lead-silver, and ferro alloys. The company claims it has 1,50,000 direct and indirect employees. Vedanta posted a revenue of USD 19 billion on the year end March 2023.
Steel Authority of India Limited
Steel Authority of India Limited, or SAIL, is one of India’s largest steel-making companies. The Government of India has about 65% ownership of SAIL’s equity and retains voting control of the Company. The SAIL, however, enjoys significant operational and financial autonomy by virtue of its ‘Maharatna’ status. The company has robust infrastructure spread across India and has five integrated steel plants, three special steel plants, and a ferro-alloy plant.
Healthy Investment Tips
The metal sector is a thriving industry in India with growing domestic and international demand. As the push for infrastructure development continues across India and in its neighbourhood, the metal stocks will continue to thrive. A key advantage in purchasing a metal stock is that the metal sector in India is well-established and deep-rooted. However, it is always advisable that any investment in the metal sector should be long-term to achieve maximum benefits.
Also, when you plan to invest in stocks, make sure you do a thorough research and have the basic knowledge about the fundamentals and working of the stock exchange, the behaviour and price fluctuation of the stocks, and the company in which you are planning to invest. Avoid emotional decision-making and follow the data.
Frequently Asked Questions
There are several metal stocks which are best for long term investment like JSW Steel Limited, Jindal Stainless Limited, Tata Steel, and Steel Authority of India. However, you must be do your research thoroughly to make an informed decision.
The demand for metals is increasing, especially since the pandemic has ended and construction and infrastructure development projects have resumed. So it is safe to say that the future of metal stocks is likely to be stable.
You can invest in metal stocks to diversify your portfolio. Also metal sector is a well-established and deep-rooted industry in India.
The key advantage of investing in the metal sector is that the demand for metals is continuously increasing as countries push for infrastructure development.
