The Nifty Metal index has delivered 16% returns so far in 2026, following a strong 29% gain in 2025. It has maintained a robust post-Covid performance with double-digit annual returns in most years, barring 2024 (8%). The standout year was 2021 with a 70% surge, followed by 2025, while 2022 saw gains of 22%. In 2020, the index rose 16%, slightly outperforming the broader Nifty 50.
With over 50% one-year returns, the Nifty Metal index has outpaced all other sectoral peers. Nifty Capital Markets (40%), Nifty PSU Bank (35%) and Nifty Defence (33%) are the other top performers.
At the stock level, National Aluminium Company has led the rally with returns of about 180%, followed by Hindustan Copper at 160%. Others such as Vedanta, Hindalco Industries, Welspun Corp, Steel Authority of India, Tata Steel, Jindal Steel and Power, NMDC, Hindustan Zinc, Jindal Stainless, Lloyds Metals and Energy, JSW Energy and APL Apollo Tubes have delivered returns ranging from 79% to 23%. The only laggard has been Adani Enterprises, with a modest 2% gain over the same period.
Supply-side problems amid a strong demand scenario have led to a spike in prices in most metal counters, inviting investor attention and benefiting the stocks. From the onset of 2025, metals have enjoyed a strong run on the D-Street and that phase has now extended to this year as well.
For instance, demand for copper has accelerated due to demand from electric vehicles, robotics, and wires & cables for electrification. Consumption-driven demand for aluminium from beverage cans, lightweighting solutions in automobiles etc has kept prices firm for this base metal as well.
“The narrative around metals being purely cyclical is genuinely changing, and the numbers back it up. Over the past five years, metals have emerged as one of the top-performing sectors alongside autos, while defensives like FMCG have struggled to keep pace,” said Rajesh Singla CEO & Fund Manager Alpha AMC.He attributed metal’s super show to the structural change in demand composition. “This is no longer just a China-construction story. The energy transition of EVs, grid infrastructure, solar and now AI data centers are creating a new, durable layer of demand for copper, aluminium, and other industrial metals. When structural demand combines with chronic underinvestment in supply over the last decade, cyclical becomes structural. That is the shift we are living through,” Singla said.
Echoing a similar sentiment, Sunny Agrawal, Head – Retail Fundamental Desk at SBI Securities said the risk–reward profile has structurally improved. While metals remain a cyclical sector, the recent outperformance is on account of three key factors viz. implementation of safeguard duties (December 2025) that have curtailed cheaper imports, sharp rise in domestic steel prices (India HRC prices up 25%+ since November 2025) and capacity additions with higher utilisation rate at large mills, supporting volume growth and margin expansion, the SBI Securities expert said.
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FII trends
While foreign institutional investors (FIIs) have been bearish on Indian equities with a selloff worth Rs 1.75 lakh crore in 2026 so far after a 2025 washout, they have reposed their faith on this sector, putting Rs 19,100 crore between April 16, 2025 and April 15, 2026. Capital Goods (Rs 25,595 crore) and telecommunication (Rs 22,254 crore) are the only sectors that have seen higher interest.
Singla sees this as global repositioning with a notable shift away from traditional heavyweights like BFSI and oil & gas. They benefit from both infrastructure capex and the energy transition, which are themes global capital is actively chasing. In his views future trends will be dictated by how global growth holds and if India’s own capex cycle sustains.
Agrawal expects FIIs to likely remain net positive on the metal sector, albeit selectively rather than being broad-based buying. Firm global and domestic metal prices, along with strong demand from infrastructure, energy transition and manufacturing, are supporting the sector, which also offers relatively better earnings visibility than other cyclicals, he said.
Valuations
Agrawal calls valuations broadly fair across the market. Commenting on NALCO and Hindustan Copper, he said both stocks are fairly valued, with future upside or downside largely dependent on movements in global metal prices.
Singla sees it as a mixed bag, with Hindustan Copper trading at a premium but NALCO fairly valued despite a multibagger rally. “Overall, the sector has become more stock-specific, where select companies have valuation support, while others are driven more by narrative and commodity cycles—making stock picking crucial over broad exposure,” he added.
Stocks to buy
Agrawal has a list of buy recommendations, namely Tata Steel, Indian Metals & Ferro Alloys (IMFA), APL Apollo India, Godawari Power and Ispat, Gravita India, Man Industries (India), Goodluck India and Lloyds Metals.
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(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)