A Sectoral Overview: NIFTY Metal

Introduction 

 

The metal industry in India has outperformed all the other industries in the past year. In retrospection, let us look at the various constituents of the NIFTY Metal index in an attempt to understand the Metal industry in India. 

 

As the name suggests, the NIFTY Metal Index is an index designed to reflect the behaviour and performance of the metals sector in India. It is one of the NIFTY Sectoral Indices provided by NSE. It serves as an important benchmark for investors.

 

The NIFTY Metal Index is made up of 15 stocks that are listed on the National Stock Exchange (NSE). And similar to the NIFTY 50 index, NIFTY Metal Index is computed using free float market capitalization method, wherein the level of the index reflects the total free float market value of all the stocks in the index relative to particular base market capitalization value. 

 

Basically, a weighted average of the 15 constituents of NIFTY Metal is taken based on their free float market capitalization which is a measure of the size of the companies being traded. Free float refers to the number of shares readily available for trading, it excludes the locked-in shares or shares not readily available for trading like shares pledged by promoters, etc.

 

This blog explores the 15 constituents of the NIFTY Metal Index, gives a technical representation of their previous price movement and establishes a pattern of bullish behaviour inherent to these stocks as well as the metal sector in its entirety. 

 

 

Constituents of NIFTY Metal:

 

Please note: All the data used below is used as of 20th June 2021, the website used for data is www.screener.in and the website used for charts is www.tradingview.com.

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NIFTY Metal’s Constituents

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1. APL Apollo Tubes Ltd: 

 

Current Price: Rs. 1550

52 week High/ Low: Rs. 1580/304

Market Cap: Rs. 19,358

P/E: 53.8

ROE: 23.6%

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APL Apollo Tubes Ltd Past Price Movement

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APL Apollo Tubes Limited (APL Apollo) is one of India’s leading branded steel products manufacturers. The Company runs Facilities churning out varieties of MS Black Pipes, Galvanised Tubes, Pre-Galvanised Tubes, Structural ERW Steel Tubes and Hollow Sections to serve industry applications like urban infrastructures, housing, irrigation, solar plants, greenhouses and engineering. The company was founded in 1986 and is headquartered in Ghaziabad, India.

 

 

2. Adani Enterprises Ltd: 

 

Current Price: Rs. 1487

52 week High/ Low: Rs. 1718/145

Market Cap: Rs. 163,597

P/E: 152

ROE: 6.33%

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Adani Enterprises Ltd Past Price Movement

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Adani Enterprises Limited, together with its subsidiaries, engages in the coal trading, coal mining, oil and gas exploration, ports, multi-modal logistics, power generation and transmission, gas distribution, and edible oil and agro commodities businesses in India and internationally. The company was founded in 1988 and is based in Ahmedabad, India.

 

(Related blog: 6 Pillars of Adani)

 

 

3. Coal India Ltd: 

 

Current Price: Rs. 146

52 week High/ Low: Rs. 165/110 

Market Cap: Rs. 90,222

P/E: 7.10

ROE: 46.1%

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Coal India Ltd Past Price Movement

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Coal India Ltd is mainly engaged in mining and production of Coal and also operates Coal washeries. The major consumers of the company are power and steel sectors. Consumers from other sectors include cement, fertilizers, brick kilns etc. The company was incorporated in 1973 and is headquartered in Kolkata, India.

 

 

4. Hindalco Industries Ltd:

 

Current Price: Rs. 371

52 week High/ Low: Rs. 428/143

Market Cap: Rs. 83,439 Cr

P/E: 21.9

ROE: 6.10%

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Hindalco Industries Ltd Past Price Movement

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Hindalco Industries Limited, together with its subsidiaries, produces and sells aluminum and copper products in India and internationally. It operates through Aluminium, Copper, Novelis, and All Other Segments. The company was founded in 1958 and is based in Mumbai, India. 

 

 

5. Hindustan Zinc Ltd: 

 

Current Price: Rs. 329

52 week High/ Low: Rs. 362/179

Market Cap: Rs. 138,971 Cr

P/E: 17.4

ROE: 22%

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Hindustan Zinc Ltd Past Price Movement

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As the name suggests, Hindustan Zinc has been one of the finest players in the Zinc mining and smelting industry. Apart from Zinc, the company operates in Lead, Silver, etc. and Wind Energy segments. It produces refined zinc and lead, and silver, as well as sulphuric acid. Hindustan Zinc Ltd is a subsidiary of Vedanta Ltd which owns the majority stake in the company. Hindustan Zinc Limited was incorporated in 1966 and is based in Udaipur, India. 

 

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6. JSW Steel Ltd: 

 

Current Price: Rs. 671

52 week High/ Low: Rs. 773/186

Market Cap: Rs. 162,099 Cr

P/E: 20.5

ROE: 19.0%

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JSW Steel Ltd Past Price Movement

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JSW Steel Limited engages in the manufacture and sale of iron and steel products in India and internationally. Its products are used in automotive, general engineering, machinery, and projects and construction applications. 

 

The company was formerly known as Jindal Vijayanagar Steel Limited and changed its name to JSW Steel Limited in June 2005. JSW Steel Limited was founded in 1982 and is based in Mumbai, India.

 

 

7. Jindal Steel & Power Ltd:

 

Current Price: Rs. 388

52 week High/ Low: Rs. 502/143

Market Cap: Rs. 39,612 Cr

P/E: 9.08

ROE: 13.6%

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Jindal Steel & Power Ltd Past Price Movement

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Jindal Steel & Power is one of India's leading steel producers with significant presence in sectors like mining and power generation including through its subsidiaries in Asia, Africa, Australia, and the Middle East. The company was incorporated in 1979 and is based in New Delhi, India.

 

 

8. MOIL Ltd:

 

Current Price: Rs. 185

52 week High/ Low: Rs. 201/119

Market Cap: Rs. 4,396 Cr

P/E: 20.6

ROE: 7.63 %

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MOIL Ltd Past Price Movement

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MOIL is engaged in one of the largest manganese ore producers of the country. It primarily operates in the Mining, Manufacturing and Power Generation segments. MOIL Limited was founded in 1896 and is headquartered in Nagpur, India.

 

 

9. NMDC Ltd:

 

Current Price: Rs. 178

52 week High/ Low: Rs. 213/75.6

Market Cap: Rs. 52,223 Cr

P/E: 13.8

ROE: 22.6 %

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NMDC Ltd Past Price Movement

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NMDC is engaged in exploration and production of Iron Ore along with Diamond, production and sale of Sponge Iron and generation and sale of Wind Power. NMDC Limited was founded in 1958 and is headquartered in Hyderabad, India.

 

 

10. National Aluminium Co. Ltd:

 

Current Price: Rs. 67.6

52 week High/ Low: Rs. 82.3/29.1

Market Cap: Rs. 12,425 Cr

P/E: 26.8

ROE: 1.33 %

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National Aluminium Co. Ltd Past Price Movement

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National Aluminium Company Limited, abbreviated as NALCO is engaged in the business of manufacturing and selling of Alumina and Aluminium. The Company is the lowest-cost producer of metallurgical grade alumina in the World and lowest-cost producer of Bauxite. National Aluminium Company Limited was founded in 1981 and is based in Bhubaneswar, India.

 

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11. Ratnamani Metal Tubes Ltd:

 

Current Price: Rs. 2,035

52 week High/ Low: Rs. 2,145/972

Market Cap: Rs. 9,510 Cr

P/E: 34.5

ROE: 14.9 %

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Ratnamani Metals & Tubes Ltd Past Price Movement

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Ratnamani Metals & Tubes is engaged in the manufacturing of stainless steel pipes and tubes and carbon steel pipes at Kutch, Indrad and Chhatral in the state of Gujarat. Ratnamani Metals & Tubes Limited was founded in 1983 and is based in Ahmedabad, India.

 

 

12. Steel Authority of India Ltd:

 

Current Price: Rs. 124

52 week High/ Low: Rs. 151/29.2

Market Cap: Rs. 51,219 Cr

P/E: 12.4

ROE: 9.47 %

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Steel Authority of India Ltd Past Price Movement

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Steel Authority of India Limited (SAIL) is one of the largest steel-making companies in India and one of the top Public Sector Enterprises (PSEs) in India. SAIL produces iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials. The company was founded in 1954 and is based in New Delhi, India.

 

(Referred blog: Public vs Private limited companies)

 

 

13. Tata Steel Ltd:

 

Current Price: Rs. 1,092

52 week High/ Low: Rs. 1,247/312

Market Cap: Rs. 131,339 Cr

P/E: 16.7

ROE: 10.8 %

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Tata Steel Ltd Past Price Movement

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Tata Steel is a crucial product of the Tata Group. It is the second largest Tata Group company based on market capitalization, the largest being Tata Consultancy Services (TCS). 

 

The company has presence across the entire value chain of steel manufacturing from mining and processing iron ore and coal to producing and distributing finished products. Tata Steel Limited was incorporated in 1907 and is based in Mumbai, India.

 

 

14. Vedanta Ltd:

 

Current Price: Rs. 252

52 week High/ Low: Rs. 296/91.2

Market Cap: Rs. 93,543 Cr

P/E: 7.76

ROE: 20.6 %

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Vedanta Ltd Past Price Movement

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Vedanta is engaged in the business of exploring, extracting and processing minerals and oil and gas. The Company engages in the exploration, production and sale of oil and gas, aluminium, copper, iron ore and power in India and globally. The company was incorporated in 1965 and is based in Mumbai, India.

 

 

15. Welspun Corp Ltd:

 

Current Price: Rs. 145

52 week High/ Low: Rs. 166/77.4

Market Cap: Rs. 3,772 Cr

P/E: 7.01

ROE: 21.7 %

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Welspun Corp Ltd Past Price Movement

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Welspun Corp Ltd. is one of the flagship companies of Welspun Group. It is a leading manufacturer of a variety of pipes. These pipes are used for offshore and onshore transmission of oil, gas and water. It is among the Largest Welded Line Pipe manufacturing companies in the world. Welspun Corp Limited was founded in 1995 and is based in Mumbai, India.

 

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Final Note:

 

The Financial Year 2020-21 was really good for the metal sector. NIFTY Metal hit a low of 1480 in March Last year and hit a high of 5520 last month (May 2021). This translates to an almost quadrupole return in a span of 14 months. As is evident from the charts above, a lot of the companies in the metal sector benefited from this dream rally of the metal index of NIFTY. 

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NIFTY Metal Past Price Movement

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The metal index was earlier trading in an approximate range of 1500-4000 for the past 10 years. It broke this range with a huge amount of investor participation last year and has since been on a dream rally.

 

The fundamental reason behind the rally can be attributed to the liquidity present in markets all over the world and the subsequent increase in foreign investments in India, change in Chinese policies towards metals and the most important one is the extremely strong demand accompanying the opening up of economies and a shortage in supply due to logistical concerns attributed to Covid restrictions, pushing up metal prices and the prices of other commodities as well.

 

Whatever the future may hold, due to the previous price movement, the metal sector has become a very attractive bet for a lot of investors and traders.