📈 HSBC Upgrades Metal Sector Ahead of Q3 Results **Date:** January 19, 2026 **Source:** HSBC Global Research **Summary of Rating and Target Price Adjustments** HSBC has issued a bullish update on the Indian metals sector, driven by a significantly improved outlook for key London Metal Exchange (LME) prices, particularly for aluminium, zinc, and silver. | Company | Previous Rating | New Rating | New Target Price (INR) | Rationale | | :--- | :--- | :--- | :--- | :--- | | **Hindustan Zinc** | Hold | **Buy** | ₹750 | Higher LME Zinc/Silver price forecasts; 12-20% increase in FY27-28 EBITDA estimates ahead of Q3 results. | | **Hindalco** | Buy (Retained) | Buy (Retained) | ₹1,240 (Raised) | Improved global aluminium and copper price outlook; $\approx$7-10% increase in FY27-28 EBITDA estimates. | | **NALCO** | Buy (Retained) | Buy (Retained) | ₹420 (Raised) | Higher LME Aluminium/Alumina price forecasts; $\approx$16% increase in FY27-28 EBITDA estimates. | --- **Key Investment Thesis Drivers** * **Commodity Price Revisions:** The brokerage has substantially raised its LME price forecasts for zinc, silver, and aluminium for the FY2026-2028 period. This re-rating is predicated on expectations of **constrained supply, resilient demand,** and the impact of a **weaker US Dollar.** * **Hindustan Zinc Valuation:** The upgrade for Hindustan Zinc to **Buy** (from Hold) reflects an improved valuation multiple (11x FY27E EV/EBITDA, up from 9.5x) justified by the firm's strong balance sheet and favorable medium-term price outlook for its core commodities. The new ₹750 target price implies an approximately 18% upside. * **Favorable Sector Outlook:** HSBC anticipates that metals with exposure to **energy-transition demand** (Copper, Aluminium, Platinum, Rhodium) and **safe-haven status** (Silver) are likely to **outperform** the broader market. The tight global supply conditions, particularly in aluminium due to China's capacity cap, are expected to provide strong price support.