Systematix, a brokerage firm, said the outlook for India's metals and mining sector is improving as non-ferrous companies are expected to remain the principal earnings drivers. The brokerage noted that capacity expansion, volume recovery and improving realisations could support select primary steel producers while raw-material costs, commodity prices and geopolitical disruptions continue as key risks. It said companies with strong expansion pipelines, cost optimisation and operating leverage were likely to outperform.\n\nThe first quarter of FY27 delivered divergent trends across Systematix's metals and mining coverage, with non-ferrous companies leading earnings growth on favourable commodity prices, lower costs and stronger copper earnings alongside improved alumina realisations. The overall EBITDA margin for the companies under coverage rose to 21.6 per cent in the first quarter of FY27 from 19.5 per cent in the fourth quarter of FY26 and 18.6 per cent a year earlier. Non-ferrous margins improved to 23.2 per cent sequentially from 21.1 per cent and from 17.8 per cent year on year.\n\nIn mining, Systematix remained positive on National Mineral Development Corporation (NMDC) supported by incremental volumes from additional deposits, mine debottlenecking and improved logistics. It observed that Coal India Limited faced weaker volumes and pricing pressure despite rising power demand, while Manganese Ore India Limited (MOIL) remained a recovery play dependent on improving production and manganese realisations. Mining and steel-pipe firms delivered mixed performances while primary steel producers reported resilient margins despite seasonally weaker volumes and higher coking-coal costs.\n\nSystematix said volume recovery, capacity expansion and operating leverage should support earnings but steel realisations, coking-coal and base-metal prices, monsoon-related demand weakness and execution of new capacity would remain critical monitorables. The brokerage highlighted that select companies with execution discipline and cost control would be better placed to navigate commodity cycles and logistical constraints. Investors would need to watch raw-material trends and geopolitical developments as potential downside risks.