Systematix: India's Metals Sector Outlook Improves on Non-Ferrous Strength

The outlook for India's metals and mining sector is improving, driven by non-ferrous companies that led earnings growth in the first quarter of FY27. According to brokerage firm Systematix, these companies benefited from favorable commodity prices, lower costs, stronger copper earnings, and improved alumina realisations.

Primary steel producers reported resilient margins despite seasonally weaker volumes and higher coking-coal costs. Mining and steel-pipe companies delivered mixed performances. The overall EBITDA margin for the companies under Systematix's coverage increased to 21.6% in 1QFY27 from 19.5% in 4QFY26 and 18.6% a year earlier.

Non-ferrous companies recorded the strongest improvement, with margins rising to 23.2% from 21.1% sequentially and 17.8% year-on-year. Systematix remains positive on NMDC, supported by incremental volumes from Deposit 4 and 13, mine debottlenecking, and improved logistics.

However, Coal India faces weaker volumes and pricing pressure despite rising power demand, while MOIL remains a recovery play dependent on improving production and manganese realisations. Systematix expects volume recovery, capacity expansion, and operating leverage to support earnings, but steel realisations, coking-coal and base-metal prices, monsoon-related demand weakness, and execution of new capacity will remain critical monitorables.