JSW Steel, JSPL Price Target Raised As Nomura Sees 'Good Times Ahead'

Nomura has issued a positive outlook on the Indian steel sector, citing key tailwinds such as production cuts in China, improving domestic demand trends and potential economic stimulus.

As such, the brokerage firm has also hiked the target price for two major steel companies, JSW Steel Ltd. and Jindal Steel Ltd. Nomura maintained a 'buy' rating on both the counters while raising the target price for JSW Steel from Rs. 1,220 to Rs. 1,300. The target price for JSPL was raised from Rs 1,080 to Rs 1,150.

Nomura believes these two companies could stand to benefit from the current trends in the Indian steel sector. Although global headwinds persist, the growth momentum in India remains strong, with infrastructure expansion, a resilient end-user industry and manufacturing growth.

Moreover, Nomura expects the Chinese production cuts to deepen, with a potential 9% year-on-year decline from August to December.

This is coupled with Beijing's potential policy easing, which in turn could go a long way in boosting the steel sector outlook in India.

Nomura believes Jindal Steel and JSPL are well-positioned to benefit from these shifting trends in the steel sector and have strong medium-term earnings visibility.

For JSW Steel, the upcoming capacity expansion, including an additional 7 million tonnes per year by FY28, should lead to strong earnings growth. Nomura sees the company's Ebitda largely in line with consensus in FY26 but higher in FY27 and FY28.

As for Jindal Steel, Nomura pointed to capacity expansion of 6.3 million tonnes per year by FY27, which should boost flat product volumes while improving raw material integration and cost reduction from new pellet and captive power plants.