Nalco Named Top Aluminium Pick as Tata Steel Keeps ₹235 Target at ICICI Securities

National Aluminium Company has taken the pole position in Indian metal portfolios.

Brokerage ICICI Securities named Nalco its top non-ferrous pick while reaffirming a strong buy rating on Tata Steel with a target price of ₹235 per share. The institutional call rests on a clean divergence in operational input dynamics across primary smelters, according to Vikash Singh, Vice President at the brokerage.

A surge in global alumina prices to $400 per tonne has upended non-ferrous cost structures. For Vedanta, that spike threatens margins—the conglomerate buys half its raw alumina on the open market, leaving shares boxed into a sideways consolidation range as London Metal Exchange cash contracts hover between $2,900 and $3,100 per tonne. Nalco sits on the exact opposite side of that ledger. The state-run smelter sells three tonnes of alumina externally for every single tonne of aluminium metal it produces.

Strong export realizations will cushion 70% to 80% of any drop in primary LME benchmarks, Singh noted. LME aluminium is projected to average $2,950 per tonne across 2027-28. Hindalco holds the firm's second preference with an outright buy, backed by India and Africa operational cash flows settling between $1,800 and $1,900 per tonne. Yet copper conversion margins face an impending reset toward the 800-to-900 band as sulfuric acid and ancillary by-product premiums dry up.

Ferrous Spreads Anchor Domestic Mill Earnings

Domestic blast furnaces tell an entirely different story. Indian hot-rolled coil prices have climbed ₹3,000 to ₹4,000 per tonne above July-September 2026 quarter averages. That pricing power is flowing straight into operational spreads.

Tata Steel is generating earnings before interest, taxes, depreciation, and amortisation of nearly ₹17,000 per tonne within India. While UK assets soften consolidated European balance sheets, home-market cash generation remains insulated. "Effectively we are in for a very good ride in terms of the spread improvement on the steel names in India," Singh confirmed.

ICICI Securities simultaneously upgraded both Steel Authority of India and Jindal Steel to buy ratings, favoring flat-product exposure over structural longs. For traders tracking metal order books, execution now pivots on quarterly domestic realizations holding above the ₹4,000 spread expansion benchmark as monsoon delivery cycles conclude.