Metal prices on fire amid Ukraine crisis. Motilal Oswal’s top stock picks here

India is a net exporter of aluminum and therefore, the brokerage believes that companies such as Hindalco, National Aluminium Company (Nalco) and Vedanta will benefit from the elevated aluminum prices. Whereas, Coal India will be the biggest beneficiary of resurgence in coal demand, and Tata is likely to be the biggest beneficiary of any steel price hike in the EU.

“Our top stock picks are Hindalco, Nalco and Coal India that are expected to benefit from rising commodities prices. We expect steel prices in Europe to rally and remain elevated and TATA is likely to be the key beneficiary of the same. The key risk to our call is curtailment in consumption at high prices resulting in sharp commodity price correction,” the note added.

Motilal Oswal believes the sanctions on Russia will lead to a disruption in supply chain for several commodities and it may take up to several months to reinstate the entire supply chain. Prices are likely to remain elevated until this is achieved.

“Hindalco will benefit substantially from the sanctions on Russian aluminum due to its strong exposure in both upstream as well as downstream segments. Nalco is a direct beneficiary of the rise in aluminum and alumina prices due to sanctioning of Russia,” the brokerage note added.

Vedanta will benefit from several commodities including but not limited to oil, aluminum, zinc, and steel, as per Motilal Oswal. While the company is likely to gain from rising commodities prices, it will also face headwinds from higher input commodity prices, especially coal.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.