“Entry at this level will be slightly tricky,” Welekar said. “People who are long can stay invested, but the upside will not be substantial because valuations have caught up with most of the positives.” He added that dips remain worth buying, but the broad metals basket no longer offers the same margin of safety it did earlier in the cycle.
Coal India: A geopolitical tailwind, quietly
Against the backdrop of stretched valuations elsewhere, Welekar flagged Coal India as one pocket where the setup looks more attractive. The Middle East crisis has pushed coal prices higher globally, and rising gas prices are expected to trigger shutdowns at gas-led power plants — redirecting demand toward domestic coal. Coal India, with its relatively reasonable valuation compared to the broader sector, stands to benefit from both dynamics.
ETMarkets.com“Gas-led power plants may experience some shutdowns, and that will increase domestic demand for coal — that could also be positively attributed to Coal India.,” says Welekar.
That said, Welekar was candid about what has held the stock back. Production and offtake growth have disappointed through the first nine months of the fiscal year — with February data actually showing a year-on-year decline in offtake. The company’s internal target of producing one billion tonnes of coal by 2030 remains intact, but the pace of ramp-up has not materialised as expected. Slower power demand across India has been part of the reason.
Aluminium: Supply shock is real, but already in the price
Hindalco and Nalco surged on the day of the interview, driven by supply disruption fears following the shutdown of Qatalum — Qatar Aluminium, a joint venture with Norsk Hydro — amid the Gulf crisis. The Gulf region contributes roughly 9–10% of global aluminium supply, making the disruption meaningful. But Welekar cautioned that the stocks are now pricing in that risk and offer limited room for further gains at current levels.
Vedanta and the demerger watch
Vedanta has delivered strong returns over the past year, supported by rising silver, zinc, oil, and aluminium prices — the last of which is now one of its largest EBITDA contributors. The next meaningful catalyst is the planned demerger, expected in the first quarter of FY27, which could unlock value particularly in the aluminium division. For now though, Welekar sees limited near-term upside given how much the stock has already rallied in anticipation.On China, he noted that the country’s focus is shifting toward quality growth over volume — curbing excess capacity through anti-involution policies — which may moderate the kind of commodity demand surge that has historically driven metals super-cycles. For India’s metals sector, the watchword right now is selectivity over momentum.