4 Stocks From Metal & Mining Sector Likely To Surge, Buy For Robust Returns, Says Motilal Oswal

Motilal Oswal assigned buy on Coal India, Hindalco Industries, Jindal Steel & Power, and NMDC in its December 2022 Result preview report released in January 2023. Among these four stocks, Coal India and NMDC are two Large cap & Midcap PSU stocks from Mining & Metal sectors. Hindalco Industries and Jindal Steel & Power are two large-cap stocks from the metal sector. The brokerage has assigned a buy on these stocks, claiming 20-30% potential returns. Here are the key highlights of the stocks from the report:

1. Coal India Ltd.

Motilal Oswal has assigned an estimated target price of Rs 275/share with a "Buy" call. The stock purchased at the current market price would likely give a potential gain of up to 28%. Coal India is a PSU Maharatna company with a market capitalisation of Rs 1,32,560 crore.

The current market price of the stock stood at Rs 215.10 per share on NSE. The stock's 52-week high is Rs 263.40/share recorded on 9 Nov' 2022, whereas, its 52-week low is 149/share recorded on 24 Feb' 2022. 

In the past 1 week surged roughly 0.4%. In the past 1 year, it gave 30.56% positive return, whereas, in the past 3 years, it gave nearly 1.68% positive return. However, in the past 5 years, it fell by 30.39%, giving a negative return.

According to the brokerage, Coal India ended 9M with a production of 479mt, up 15.8% YoY, and is expected to exit FY23 at 700mt. Management guidance on coal availability for e-auction is critical for the profitability growth of the company. Supply to power sector during Apr-Dec stood at 432.7mt; up 11% YoY. Management commentary on the National Coal Wage Agreement and possibility of FSA price hike.

2. Hindalco Industries Ltd.

Motilal Oswal recommends buy the stock Hindalco Industries with a target price of Rs 600/share. The brokerage sees a 23% potential upside from its current level considering the given target price. Hindalco Industries is Aditya Birla Group's flagship metal sector company with a market capitalisation of 1,09,774 crore. 

The share price of Hindalco Industries closed at Rs 488.50/share on NSE. It recorded 52 week low on 20 Jun' 2022 at Rs 308.95 and the 52 week high on 29 Mar' 2022 at Rs 636, respectively.

The stock has surged 5.59% in the last 1 week. However, it fell 3.74% in the last 1 year. In the last 3 years, it gave 131.3% massive returns. In the past 5 years, it gave 81.7% positive returns.

According to the brokerage, Commentary on availability and coal linkage is important. Timeline on greenfield aluminum rolling mill is important. Management guidance on capex, aluminum spreads, CoP and Novelis EBITDA/t are critical. We await management guidance on domestic Aluminum demand.

3. Jindal Steel & Power Ltd. (JSP)

Motilal Oswal has initiated a "buy" on JSP with a target price of Rs 735/share. If stock is purchased at the current market price, it could fetch up to 21% potential gains. JSP has a presence in the power, steel, mining and infrastructure sectors having a market capitalisation of Rs. 62,225.37 crore.
The stock last traded at Rs 610 per share on NSE, hitting 52 new 52 week high at Rs 612.80/share. While its 52-week low it hit in 22 Jun' 2022 at Rs 304.20/share. The stock surged 3.2% in a week. Over a year, the stock has given 47.63% positive returns. It has given 242.6% massive returns in the last 3 years and 130.32% returns in the last 5 years, respectively. 

According to the brokerage, Expect sales volumes at 2.18mt; production outlook for FY24 is important. Management guidance on procurement of coal from captive mine is crucial. Management commentary on further debt reduction will be the key monitorable. Management guidance on FY23 capex plans and timelines is important.

4. NMDC Ltd.

Motilal Oswal has placed a "buy" on Stock with a target price of Rs 160/share. It sees a 23% potential upside in the share price from its current price. NMDC is a midcap PSU Navratna company under the ownership of the Ministry of Steel, Government of India. It has a market capitalisation of Rs 38,420.24 crore. 

The stock last traded at Rs 131.10/share on NSE, 2.02% up from the previous close. The stock recorded its 52 week low at Rs 92.25/share on 27 Oct' 2022 and 52 week high at Rs 175.35/share on 11 Apr' 2022, respectively.
The stock surged 7.64% in the last 1 week. However, it has fallen 10.24% in the last 1 year. In 3 years it gave 6.37% positive returns and in 5 years, it gave 15.39% negative returns, respectively. 

According to the brokerage, Management guidance on FY23 volumes and iron ore prices is critical. Guidance on domestic and international demand is crucial. Timeline on sale/disinvestment of the steel plant to prospective buyers is an important monitorable. Any guidance on capex and commissioning of new mines are key monitorables.

Disclaimer

The stocks has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.