The brokerage’s coverage universe reported an average Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margin of 21.6% in 1QFY27, compared with 18.6% a year earlier, marking an expansion of 298 basis points.
Non-ferrous companies outperformed their peers, with aggregate EBITDA margins rising to 23.2% from 17.8% in the corresponding quarter last year.
Among individual companies, Vedanta Aluminium reported the sharpest year-on-year margin expansion, with EBITDA margin jumping 1,867 basis points to 48.8% in 1QFY27 from 30.1% a year earlier. NALCO followed, with margin expanding 1,187 basis points to 51.1%, while Hindustan Zinc posted a 1,093-basis-point increase to 61.8%.
| Rank | Company | Q1FY26 EBITDA margin | Q1FY27 EBITDA margin | YoY change |
| 1 | Vedanta Aluminium Metal | 30.10% | 48.80% | 1,867 bps |
| 2 | NALCO | 39.20% | 51.10% | 1,187 bps |
| 3 | Hindustan Zinc | 50.80% | 61.80% | 1,093 bps |
| 4 | SAIL | 10.70% | 15.80% | 514 bps |
| 5 | Hindalco | 12.60% | 16.50% | 390 bps |
| 6 | JSW Steel | 14.80% | 18.20% | 345 bps |
| 7 | Welspun Corp | 14.80% | 17.00% | 218 bps |
| 8 | Tata Steel | 14.00% | 15.20% | 127 bps |
| 9 | Jindal Stainless | 12.80% | 12.80% | 0 bps |
| 10 | NMDC | 36.80% | 36.30% | -45 bps |
| 11 | MOIL | 40.10% | 37.50% | -260 bps |
| 12 | Jindal Steel | 24.40% | 17.2% | -723 bps |
| 13 | Jindal Saw | 16.40% | 8.90% | -750 bps |
| 14 | Coal India | 31.00% | 22.1% | -891 bps |
The strongest margin gains were concentrated in the non-ferrous segment, where Systematix attributed earnings growth to favourable commodity prices, lower costs, operating leverage, stronger copper earnings and improved alumina realisations.
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Among steelmakers, JSW Steel posted the strongest margin performance among large steel producers, with EBITDA margin rising 345 basis points year-on-year to 18.2%.
SAIL’s margin increased 514 basis points to 15.8%, while Tata Steel’s expanded 127 basis points to 15.2%. Jindal Steel, however, saw its margin decline 632 basis points from a high base in 1QFY26.
In the mining segment, margins were mixed. NMDC’s EBITDA margin was broadly stable at 36.3%, while Coal India’s fell to 23.5% from 31% and MOIL’s declined to 37.5% from 40.1%.
Systematix said primary steel companies delivered resilient margins on stronger realisations despite higher coking coal costs and seasonally lower volumes, while mining and steel pipe companies faced more mixed conditions. The brokerage’s preferred picks include Jindal Steel, Jindal Stainless, Vedanta Aluminium Metal, JSW Steel, APL Apollo Tubes, NMDC, Welspun Corp and Hindalco.
Copper: LME stocks rise, but near-term supply remains tight
Copper prices have come under pressure after a rise in inventories on the London Metal Exchange (LME). On-warrant LME copper stocks increased by more than 35,000 tonnes, the biggest increase since 2024, following inflows of more than 20,000 tonnes in the previous session. The increase has eased some pressure after LME inventories had fallen amid higher shipments to the US.
The premium for immediate-delivery copper over three-month contracts has also narrowed, with the spread falling to $207 a tonne from as much as $545 earlier in the week. However, a measure of near-term market tightness remains elevated, while the copper market has stayed in backwardation since late July. China’s refined copper output rose 1.3% year-on-year to 1.285 million tonnes in July, while a favourable import arbitrage is encouraging more metal to flow into the country.
For Indian producers, Systematix said higher sulfuric acid prices are expected to support copper margins at Hindalco despite low treatment and refining charges (TCRCs), with copper EBITDA expected to remain similar in the second quarter.
Aluminium: Supply concerns ease as UAE smelter plans output recovery
Aluminium prices have retreated after Emirates Global Aluminium (EGA) said it aims to restore production at its main smelter to pre-war levels in the first quarter of next year. The smelter was shut after an Iranian strike in March, and the planned production recovery has eased some concerns over supply.
Aluminium prices had risen for seven consecutive sessions before the latest decline, amid concerns over the Strait of Hormuz, a key export route for smelters in the region. LME aluminium inventories remain at their lowest level since 1990.
In Australia, the owners of the Tomago aluminium smelter secured a A$2.5 billion government bailout to support continued operations. The 590,000-tonne-a-year smelter is among the capacity being supported by the government.
Systematix said Vedanta Aluminium Metal’s EBITDA per tonne rose to $1,804 in 1QFY27 from $1,511 in the previous quarter, helped by higher volumes, cost optimisation, marketing initiatives and market conditions. The company retained its FY27 hot metal cost guidance of $1,650-1,700 per tonne.
Zinc: Silver remains a key earnings driver
For zinc, Hindustan Zinc’s earnings continue to benefit from its silver exposure. Systematix said silver contributes around 46% of the company’s overall profitability, supported by debottlenecking projects, higher operational efficiency and the company’s low zinc cost of production.
Hindustan Zinc retained its FY27 guidance of 1.1 million tonnes of mined metal production and 680 tonnes of silver production. The company expects silver grades and production to improve through the second to fourth quarters, while its cost of production is expected to improve in the second quarter with higher metal production and supportive sulfuric acid prices.
Steel: Higher coking coal costs remain a key pressure point
Steelmakers are facing higher coking coal costs as supplies tighten in China. Coking coal futures in Dalian have risen 15% this week to as much as 1,583.50 yuan a tonne, their highest level since October 2024. The rise follows safety inspections in Shanxi, China’s largest coal-producing province, after a major mining accident.
More than 130 million tonnes of annual coal capacity was suspended during safety checks in late May, with around 50-60 million tonnes still offline, according to the material provided. China’s coking coal imports rose 34% year-on-year in June, with further strong arrivals expected despite a seasonal decline in steel output.
The higher domestic coal prices are adding pressure on steel mill margins, while Chinese steel production has also been affected by weaker demand.
In India, Systematix said primary steel companies delivered resilient margins in 1QFY27 on stronger steel realisations despite higher coking coal costs and seasonally lower volumes. JSW Steel’s EBITDA margin rose to 18.2% from 14.8% a year earlier, while SAIL’s increased to 15.8% from 10.7%. Tata Steel’s margin rose to 15.2% from 14%.
Mining: Performance remains mixed
The mining segment saw a more mixed performance in 1QFY27. Systematix said NMDC remained relatively resilient, with its EBITDA margin at 36.3%, broadly stable from 36.8% a year earlier, while Coal India’s margin declined to 23.5% from 31%. MOIL’s EBITDA margin stood at 37.5%, compared with 40.1% a year earlier.
Coal India reported higher maintenance and other expenses during the quarter, while MOIL’s performance was supported by higher blended realisations and lower raw material costs, although sales volumes declined sequentially.
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