Axis Securities Q4 Mining Report: Axis Securities offers a positive outlook on the mining sector for the March quarter (Q4FY25). The brokerage house anticipates better earnings for select mining companies this quarter. This is attributed to rising aluminum prices, declining coal costs, and improved operating margins.
Axis has identified Hindalco, Gravita India, Coal India, Vedanta, NALCO, and NMDC as top picks.
Hindalco: Confidence in Steady Performance
Hindalco's sales are not expected to see major year-on-year (YoY) changes, but a quarter-on-quarter growth of approximately 5.3% is anticipated. Strong performance is also expected from Novelis (US Unit), where EBITDA per ton could remain above $490. Axis has assigned a BUY rating with a target price of ₹765, representing an upside of approximately 24% from the current price of ₹618.15.
Gravita India: Profitability Expected Across All Divisions
Gravita India's EBITDA is projected to exceed ₹105 crore. This is attributed to stable sales in the lead segment and improved margins from the aluminum and plastic divisions. Axis has given it a BUY rating with a target price of ₹3,250, representing an upside of approximately 70% from the current price of ₹1,915.
Coal India: Increased Profitability Due to Falling Costs
Coal India is expected to directly benefit from stable coal prices and reduced costs, leading to improved operating margins. Axis recommends a BUY rating with a target price of ₹440, approximately 11% higher than the current price of ₹395.40.
Vedanta: Supported by Metal Price Stability
Vedanta is expected to benefit from stable metal prices and improved cost control. Using the SoTP valuation method, Axis has assigned a BUY rating with a target price of ₹605, indicating an upside potential of 53% from the current price of ₹395.80.
NALCO: Relief from Efficient Operations
While NALCO may face pressure from declining aluminum prices, its improved cost efficiency is providing support. Axis has assigned an ADD rating with a target price of ₹205, representing an approximate 35% upside from the current price of ₹151.45.
NMDC: Domestic Demand as Growth Driver
NMDC is poised to benefit from rising domestic demand. Increased sales are expected to improve profit margins. Axis has also assigned an ADD rating with a target price of ₹73, approximately 12% higher than the current price of ₹65.18.
