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What’s the Point?
India’s core sectors remain in expansion mode, with rising mining and industrial activity lifting overall output growth YoY to a five‑month high in June 2026.
Strong gains in metal production including iron ore(43.9% YoY in June 2026) and steel (4.6% YoY in June 2026), and power and cement production highlight broad industrial resilience and improving utilisation across the economy.
Furthermore, steady expansion in power and cement points to a firming industrial capex cycle—an encouraging signal for metal producers that underpin much of this investment activity.
India’s core sector output grew 5% year‑on‑year in June 2026, reaching a five‑month high, driven by a sharp rebound in mining and industrial activity. The standout contributors were iron ore, power, and steel, all of which showed strong expansion, underscoring a broad‑based industrial pickup:
a) Iron Ore: Sharp increase in production of this critical input into steel manufacturing
Iron ore production surged 43.9% YoY in June 2026,an acceleration from 19% YoY growth in May 2026.
This increase follows the inclusion of iron ore in the revised Index of Core Industries (ICI), reflecting its growing importance in India’s industrial ecosystem.
b) Steel: Consistent multi-year growth continues
Steel production grew 4.6% YoY in June 2026, remaining firmly in expansion territory, signalling improved demand from construction, automobiles, and capital goods.While the YoY growth for steel output has moderated, relative to 2025, it is still firmly in positive territory.
c) Electricity and Cement: Robust growth
Electricity output expanded 9.8% YoY in June 2026, supported by elevated summer demand. Cement production also rose 9.8% YoY in June 2026, indicating resilient demand from the infrastructure and construction sectors.
HDFC Nifty Metal ETF FOF NFO: A structural opportunity meets a robust domestic backdrop
Metals underpin everything from everyday living to national security, making them indispensable to the functioning and resilience of modern economies. Demand is being reinforced not only by India’s ongoing capex cycle and infrastructure push, but also by new‑age drivers like AI / data centres, renewable energy sector growth, and the fast‑growing EV ecosystem. At the same time, national strategic stock piling is tightening supply chains as countries race to secure critical minerals. In India, supportive policies including Production Linked Incentive (PLI) schemes and safeguard duties are supportive of the industry — potentially creating a durable, multi‑year runway for the entire metals value chain.
Character/s and/or illustrations featured in this content are generated using Artificial Intelligence, solely for conceptual purposes. Source: Companies in the Nifty Metal Index primarily produce steel, aluminium and refined copper. For more details and methodology, please visit www.niftyindices.com
Conclusion
India’s core industrial data point to a resilient domestic economy, with steady gains across mining, electricity and cement, reinforcing expectations of a broadening capex cycle. This improving backdrop, combined with structural drivers, positions the entire metals value chain as an attractive long‑term opportunity.
Recent production trends further helps strengthen the investment case for the Indian metals sector. Rising iron ore and steel output indicate healthier volumes and improving utilisation, while sustained growth in power and cement signals a strengthening capex cycle—supportive for metal companies central to this build‑out. Investors looking for focused exposure to the sector may consider the HDFC Nifty Metal ETF FOF@ (NFO Period: 20th July – 3rd August, 2026).
Source: CMIE, PIB, publicly available information.
@The Scheme being sectoral in nature carries higher risks versus diversified equity mutual funds on account of concentration and sector specific risks.
^Investors in the Scheme shall bear the recurring expenses of the Scheme in addition to the expenses of other schemes in which this Fund of Funds scheme makes investment (subject to regulatory limits).
HDFC Bank (Sponsor of HDFC Mutual Fund) is not liable or responsible for any loss or shortfall resulting from the operations of the scheme.
NIFTY Disclaimer: HDFC Nifty Metal ETF FOF "(the Product)" offered by HDFC Asset Management Company Limited are not sponsored, endorsed, sold or promoted by NSE INDICES LIMITED (formerly known as India Index Services & Products Limited (IISL)). NSE INDICES LIMITED does not make any representation or warranty, express or implied (including warranties of merchantability or fitness for particular purpose or use) and disclaims all liability to the owners of the Products or any member of the public regarding the advisability of investing in securities generally or in the Product linked to Nifty Metal Index (TRI) or particularly in the ability of the Nifty Metal Index (TRI) to track general stock market performance in India. Please read the full Disclaimers in relation to Nifty Metal Index (TRI) in the SID of the Product.
Disclaimer: Views expressed herein are based on information available in publicly accessible media, involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied herein. The information herein is for general purposes only.Stocks/Sectors/Views referred are illustrative and should not be construed as an investment advice or a research report or a recommendation by HDFC Mutual Fund (“the Fund”) / HDFC Asset Management Company Limited (HDFC AMC) to buy or sell the stock or any other security. HDFC AMC is not indicating or guaranteeing returns on any investments.Past performance may or may not be sustained in the future and is not a guarantee of any future returns. The recipient(s), before taking any decision, should make their own investigation and seek appropriate professional advice.
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This article is authored by the HDFC Mutual Fund team.
