Steel companies are expected to report strong EBIDTA in the fourth quarter of FY26, according to Macquarie.The brokerage has also revised its target price for steel majors, including Jindal Steel, Hindalco, JSW Steel and Tata Steel.
Domestic demand for steel remains robust, with prices rebounding 13-14% from the lows seen in December 2025. Also, India has become a net exporter of steel. All these factors are expected to drive the earnings of steel companies. However, the upside will be partially offset by higher iron ore and coking coal costs.
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JSW Steel is Macquarie's top pick. The brokerage has given it an 'outperform' rating at a target price of Rs 1,353, marking a 12% upside from its previous close of Rs 1,210. The note highlighted the company's capacity growth, strong operating cashflow, while flagging key downside risks such as weaker-than-expected volume growth as ramp up of the new capacity is delayed, softer steel prices as compared to the brokerage's expectations, and concerns over an unexpected negative balance sheet.
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The brokerage has given a 'neutral' rating to Hindalco and revised the target price to Rs 1,080, a 10% upside from the previous closing price of Rs 985. Firm aluminium prices and quarter on quarter improvement in the performance of Novelis should support Hindalco's earnings. In Q4FY26, average global aluminium prices have been 10% higher quarter on quarter, driving 9% EBITDA growth for India business. Novelis' performance is expected to improve following production disruption in the past couple of quarters.
Macquarie has given Jindal Steel an 'outperform' rating over higher growth potential and improving product mix in comparison to its peers. The brokerage has set a target price of Rs 1,321, a 10% upside. Delays in ramping up of the steel capacity, domestic long steel price weakness, and a negative balance sheet leading to lower stock multiple are some of the downside risks.
The brokerage has revised the target price of Coal India to Rs 445, a 2% downside from the closing price of Rs 454. The 'neutral' rating reflects a modest downside following the stock's recent outperformance, besides a 5-6% dividend yield, the note said.
The target price of Tata Steel has been revised to Rs 241, with the brokerage giving it an 'outperform' rating, marking an 18% upside from its last closing price of Rs 205. The company is expected to benefit from a sequential uptick in EU business performance. Key downside risks for Tata Steel include a weakening in domestic steel prices as the current price premium contracts, higher-than-expected losses, weaker-than-anticiipated margins in its EU operations, and a rise in leverage beyond expectations.
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