New Delhi: India’s metals and mining sector is showing signs of a stronger recovery, with non-ferrous companies emerging as the key drivers of earnings growth, according to brokerage firm Systematix. The outlook is also improving for select primary steel producers, supported by capacity expansion, volume recovery and better realisations.
Systematix said the first quarter of FY27 delivered mixed performance across the metals and mining universe. Non-ferrous companies recorded the strongest improvement, helped by favourable commodity prices, lower costs, stronger copper earnings and improved alumina realisations.
The overall EBITDA margin of companies covered by Systematix rose to 21.6% in Q1 FY27, compared with 19.5% in Q4 FY26 and 18.6% a year earlier. Non-ferrous companies led the improvement, with margins increasing to 23.2%, from 21.1% sequentially and 17.8% in the year-ago quarter.
Steel Sector Shows Resilience
Primary steel producers maintained resilient margins despite seasonally weaker volumes and higher coking-coal costs. Systematix expects companies with strong expansion pipelines, cost optimisation and operating leverage to remain better positioned as demand and volumes recover.
In the mining segment, Systematix remains positive on NMDC, citing incremental volumes, mine debottlenecking and improved logistics. However, Coal India continues to face volume and pricing pressures, while MOIL’s recovery prospects depend on improvements in production and manganese realisations.
Risks Remain
Despite the improving outlook, the sector continues to face risks from raw-material costs, commodity-price volatility, geopolitical disruptions and fluctuations in steel realisations. Coking-coal and base-metal prices, monsoon-related demand weakness and the execution of new capacity will remain important factors to watch.
Overall, the latest earnings trend suggests that non-ferrous metals are currently leading the recovery, while improving volumes, capacity additions and operating leverage could provide further support to the broader metals sector.