Tata Steel to JSW Steel: ICICI Securities recommends THESE four metal stocks to buy before Q4 results 2025

Metal stocks to buy: ICICI Securities indicated that ferrous companies are likely to benefit after the provisional safeguard duty was imposed in Q4FY25. On the other hand, non-ferrous companies may face challenges due to the ongoing tariff conflicts. The domestic brokerage firm continues to favour ferrous companies over non-ferrous ones, highlighting Tata Steel (TP: ₹180), JSW Steel (TP: ₹1,230), Shyam Metalics (TP: ₹930), and APL Apollo (TP: ₹1,935) – all rated as BUY – as their key picks in this sector.

The brokerage suggests that investors are anticipating developments beyond Q4FY25, with tariffs becoming a central focus. They believe that firms with business strategies centered on the domestic market – such as Shyam Metalics, APL Apollo, and JSW Steel – are likely to perform more favourably. Although they maintain a positive outlook on non-ferrous metals in the medium term, these stocks may not perform as well due to their stronger connection to global trade and LME prices.

Profitability bottoms out for ferrous

As per the brokerage's analysis, even though there was a slight decline in demand growth, Q4FY25 exhibited stable pricing and improved spreads for ferrous products. Regarding non-ferrous materials, the price of LME Aluminum increased by 2% quarter-on-quarter, whereas the price of LME Zinc decreased by 8% quarter-on-quarter. Key highlights include: Projected volume growth for ferrous companies is anticipated to be a modest 3–6% year-on-year, while JSW Steel (which includes the expansion at Vijayanagar) is expected to see a growth of 9% year-on-year.

Secondly, expected growth in EBITDA per ton (adjusted for one-time items) is projected to be ₹500–800 per ton. Thirdly, for ferrous producers, coking coal costs are anticipated to decrease by USD 10-15 per ton; however, blended realisation may remain unchanged compared to the previous quarter.

Fourthly, it is likely that all players will experience some unlocking of working capital. Lastly, non-ferrous companies are expected to maintain stable performance despite a significant drop in LME Zinc and alumina prices, thanks to reduced costs and/or improvements in operating leverage. Overall, the brokerage predicts quarter-on-quarter EBITDA growth for most firms in the sector.

Four stocks in focus

APL Apollo

As per the brokerage, EBITDA per tonne is expected to rebound to ₹4,700, reflecting a 14% increase year-on-year and a 13% rise quarter-on-quarter, with EBITDA projected to surpass ₹4 billion.

Shyam Metalics

As per the brokerage, EBITDA is expected to exceed ₹5 billion, achieving its highest level since Q1FY23, driven by an improved product mix and reduced costs. The EBITDA margin is anticipated to grow by 40 basis points quarter-over-quarter.

Hindalco

The brokerage reported that the sales volume is expected to remain steady year-over-year, but increase by 5.3% quarter-over-quarter. Novelis' EBITDA per ton is anticipated to surpass USD 490 due to improved scrap spreads and growth in recycling and beverage can volumes.

Gravita India

According to the brokerage, EBITDA (including gains from hedging) is expected to surpass ₹1.05 billion, supported by consistent volume growth in Pb and improved profitability in the Al and plastics sectors. Additionally, Gravita India is anticipated to report a profit at the EBITDA level once more (following a loss in Q3FY25) despite the difficult market environment.

“We expect Jindal Stainless Ltd's standalone EBITDA to slip owing to lower exports, higher freight expenses and one-off costs in Q4FY25,” said the brokerage.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.