Metal counters fell under tremendous pressure today, as investors moved away from the sector, thus affecting several stocks with significantly lower rates on the National Stock Exchange (NSE). The Nifty Metal index reflects the weakness, when it declined around 2 per cent during the session and slipped to an intraday low of INR 11,713.05 (USD 129.11).

The loss was completely evident across key industry players. Steel Authority of India (SAIL), National Aluminium Company (Nalco), Jindal Stainless, and Hindalco all registered losses exceeding 2 per cent by late morning. Other major names, including Vedanta, Hindustan Zinc, NMDC, and Tata Steel, also traded in negative territory, each recording declines of more than 1 per cent.

InCred Equities has revised its outlook on aluminium producers Hindalco and Nalco, assigning both stocks a ‘Reduce’ rating. Price objectives have been outlined at INR 631 ( USD 7.60) per share for Hindalco Industries Limited and INR 302 ( USD 3.64)  per share for National Aluminium Company (Nalco). According to the brokerage’s view, share prices already appear to reflect the benefit of currently strong aluminium rates, which means the scope for meaningful gains from present levels may be constrained.

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The brokerage also warned that the aluminium prices could also face downward pressure if supply conditions become more favourable, particularly with increased scrap availability entering the market. It added that recent price strength appears to be influenced more by broader economic and financial factors than by structural improvements in demand. Any moderation in aluminium prices could weaken earnings visibility for domestic producers, making existing stock valuations harder to justify.

Another concern highlighted for Hindalco Industries Limited relates to its American subsidiary, Novelis Inc., which is grappling with higher energy expenses. Electricity tariffs in the United States have risen sharply as expanding AI infrastructure and data centre activity place heavier demands on the power grid. This escalation in input costs has begun to weigh on Novelis’s operating performance by compressing its margins. With no immediate relief in energy prices expected, the brokerage anticipates that the company’s Ebitda per tonne will remain under strain, supporting its more cautious stance on the stock.

Separately, InCred Equities noted that the recent firmness in aluminium prices seems to be linked more to external economic influences than to rising production costs. In particular, the softer US dollar has provided support to prices. Despite weaker profitability in alumina, most primary aluminium producers continue to operate in the black. This indicates that prevailing aluminium prices are being shaped largely by broader financial and currency trends, rather than by underlying supply-demand dynamics alone.

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Shares of Hindustan Zinc Limited and its parent Vedanta Limited weakened following a fall in silver prices, reflecting the metal’s importance to their overall earnings profile. Hindustan Zinc is recognised as the world’s largest integrated zinc producer and ranks among the leading global suppliers of silver. The company operates under Vedanta’s control, with the parent holding a 61.8 per cent ownership, while the Government of India retains a 28 per cent stake, based on the latest shareholding disclosures.

The decline in silver prices added pressure to sentiment, as lower realisations from the precious metal can directly affect profitability for producers with significant exposure to silver output. This sensitivity often translates into stock price volatility when commodity prices shift.

Simultaneously, Incred Equities analysts maintain a constructive outlook about steel, describing it as strategically important in the global metal business premise. In India, supportive policies and the possibility of regulatory intervention are strengthening steel’s medium-term outlook.

The brokerage also pointed to favourable long-term demand trends and relatively limited downside risk to steel prices, factors that could support a sustained improvement in valuations. Within the sector, Tata Steel Limited has been identified as its preferred pick, carrying an ‘Add’ recommendation along with a target price of INR 224 (USD 2.70) per share.