JSW Steel Q1 Results Review: Citi, CLSA Remain Cautious After Earnings, But Hike Target Price — Here's Why

Brokerages remained cautious on JSW Steel Ltd., following first quarter results. While CLSA maintained "Underperform' with a target price of Rs 890 from Rs 880, Citi retained its "Sell' rating with target price of Rs 880 from Rs 760.

CLSA made minor adjustments to its FY26-28 CL Ebitda estimates to reflect the recent results and increased the target price mainly due to slightly lower debt levels.

JSW indicated a potentially better Q2FY26, backed by lower costs. Coking coal prices are expected to decline by $3 per tonne quarter-on-quarter, which would bring them closer to current spot levels. Additionally, the Rs 2- billion in shutdown-related costs incurred in first quarter are unlikely to recur, the brokerage noted.

CSLA also pointed out that the foreign exchange loss in the first quarter is not expected to repeat. This may be partly offset by lower steel prices.

"JVML's profitability is eventually likely to be better than erstwhile capacities given larger furnace and efficiencies, and is guided for Rs 1,500 per tonne profitability improvement," the brokerage added.

Citi has tweaked its FY26/FY27/28 Ebitda estimates by 0%/-1%/0%. "We incorporate standalone Ebita/t at Rs 11,100/Rs 11,150/Rs 11,300 for FY26/27/28E. We now value JSTL at 8 times Mar27E EV/Ebitda, around 1SD above 10- yr trading average vs. 7.5 times Sep26E EV/Ebitda."

"Our target price increase is on a roll forward and higher multiple," the brokerage said.

The brokerage believes supply-side reform 2.0 will take place, although the upside might be milder. "We think safeguard duties may not be hiked, 1Q imports fell approximately 27% year-on-year."