HSBC Initiates Coverage On Metals: Check Target Price For Tata Steel, Hindalco, Coal India And More

HSBC has kickstarted its coverage for India's metals and mining sector, with the brokerage firm notably sharing a bullish outlook on key Indian metal producers including the likes of Hindalco and Tata Steel.

In latest note, HSBC pointed out a potential 'sweet spot' for aluminium as far as India's metals industry is concerned while noting that there is a strong multi-year growth prospect for domestic steel.

While HSBC acknowledged valuations within India's metals space is comparatively higher versus global peers, the firm believes those valuations are justified due to 'plenty of positives'.

Some of these positives include robust demand and favourable policy shifts.

HSBC has initiated coverage on a series of metal stocks, including the likes of Hindalco, NALCO, Tata Steel, NMDC and more.

For Hindalco, the firm has initiated coverage with a 'buy' rating and a target price of Rs 980, which is a significant upside from current levels. The same can be said for NALCO, which has a target price of Rs 291.

For the steel sector, HSBC has initiated a 'buy' call on Tata Steel with a target price of Rs 215, forecasting 'multi-year' growth ahead for the industry.

However, HSBC was less optimistic about SAIL, which has received a 'reduce' rating and a target price of Rs 114, which is well below its current market price.

HSBC's outlook on the mining space was mixed. The firm initiated coverage on Coal India with a 'hold' rating and a target price of Rs 374 while Hindustan Zinc also received a similar rating with a target price of Rs 470.

NMDC faced the steepest bearish call from HSBC, which has initiated a 'reduce' call with a target price of Rs 59, which is considerably below the current market price of Rs 75, thus implying 21% downside.