Hidden Metal Gems: 3 Undervalued Indian Stocks Set to Soar Amidst Growth Boom!

Hidden Gems in India's Metal Sector

While the metal sector is typically known for its volatility and constant investor attention on product cycles and prices, a quieter transformation is underway. Several mid-tier Indian metal companies have silently fortified their balance sheets, maintained strong profit margins, and boosted their incomes. Astonishingly, they continue to trade at valuations that suggest they are stuck in a past economic cycle, creating a curious disconnect.

India's relentless industrial expansion, burgeoning infrastructure projects, increasing manufacturing output, and the booming demand for green-energy components all point to a sustained, long-term need for metals. Yet, some of the most strategically positioned companies within this sector are being overlooked, failing to capture investor interest despite their strong performance.

This analysis highlights three such metal stocks identified from Screener.in and company filings, which exhibit low Price-to-Earnings (P/E) and Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortisation (EV/EBITDA) ratios compared to industry averages, alongside robust fundamental strength.

Maithan Alloys: The Turnaround Play

Maithan Alloys, a prominent ferro-alloys maker, often flies under the radar. Its consolidated net profit surged by approximately 182% year-over-year in FY25 (excluding one-time adjustments) to ₹758 crore, driven by effective gains and improved price realisations. Revenue for the second quarter stood at ₹491 crore, a 5.37% year-over-year increase. Despite challenges from rising power costs and fluctuating demand, the company has a strong financial profile, with its EV/EBITDA at a mere 4.51x and P/E at 6.20x, significantly below industry medians. A substantial reduction in debt during FY24-FY26 has further strengthened its balance sheet.

Jindal SAW: The Infrastructure Proxy

Jindal SAW operates at the intersection of industrial metals manufacturing and downstream pipe supply, making it a unique infrastructure proxy. The company provides essential products for water systems, oil & gas, and manufacturing networks. Despite its strategic importance, market attention has been limited. In Q2FY26, it posted revenue of ₹4,234 crore, a 24% year-over-year drop, with net profit at ₹139 crore, down 70%. However, its valuation remains attractive, with a P/E of 7.63x and EV/EBITDA of approximately 5.3x. The stock has shown strong long-term growth, with a 52% compounded annual growth rate over three years.

National Aluminium Company (NALCO): Integrated Growth Beast

NALCO is one of India's most integrated aluminium producers, offering a distinct advantage by controlling raw material costs. Despite its strong position and the high demand for aluminium driven by India's infrastructure push, it remains undervalued. Recent quarters show increased alumina and metal output, strong power plant performance, and improved cost efficiency. Revenue rose 7.27% year-over-year to ₹4,292 crore in Q2FY26, with net profit jumping 37% year-over-year to ₹1,430 crore. Its valuation is compelling, with a P/E of 7.97x and EV/EBITDA of 4.60x, well below industry averages.

Common Strengths and Potential Risks

All three companies share common traits: they trade at EV/EBITDA multiples far below industry averages, possess healthy balance sheets with minimal debt or net-cash positions, and are directly linked to India's macro growth themes like infrastructure, industrial output, and energy demand. The primary risks include potential drops in global demand for metals, rising energy and raw material costs, and changes in international trade policies like tariffs or anti-dumping measures.

Impact

• Possible Effects: This news can encourage investors to look beyond highly visible large-cap stocks and explore mid-cap opportunities with strong fundamentals. It highlights a potential undervaluation in specific segments of the metals sector, which could lead to stock price appreciation if market sentiment shifts or growth materializes as expected. Investors might consider diversifying their portfolios with companies tied to India's core growth drivers.
• Impact Rating: 8/10

Difficult Terms Explained

• P/E (Price-to-Earnings Ratio): A valuation metric that compares a company's stock price to its earnings per share. It indicates how much investors are willing to pay for each dollar of earnings.
• EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortisation): A valuation metric that measures a company's total value (market capitalization plus debt, minus cash) relative to its earnings before interest, taxes, depreciation, and amortization. It's considered a more comprehensive measure than P/E.
• Consolidated Net Profit: The total profit of a company and all its subsidiaries after all expenses and taxes have been deducted.
• YoY (Year-over-Year): A comparison of a metric from the current period to the same period in the previous year.
• Ferro-alloys: Alloys of iron with a high proportion of one or more other elements, such as manganese, silicon, or chromium, used in steel production.
• ROE (Return on Equity): A profitability ratio that measures how effectively a company uses shareholder investments to generate profits.
• CAGR (Compound Annual Growth Rate): The mean annual growth rate of an investment over a specified period of years. It represents the smoothed-out annual growth rate.