JSW Steel's consolidated Ebitda was significantly higher than Street. The beat was primarily driven by higher than expected realisations and significantly improved subsidiary performance. 
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JSW Steel's consolidated Ebitda was significantly higher than Street. The beat was primarily driven by higher than expected realisations and significantly improved subsidiary performance. Integrated steel producer JSW Steel might have seen the biggest FY24 earnings per share upgrade among Nifty constituents at 34 per cent, share price targets on the stock offered by a few brokerages suggest limited upside potential ahead. ICICI Securities, Geojit Financial Services, BOB Capital Markets are some of the brokerages that have 'hold' rating on the stock. For JM Financial, JSW Steel is a 'Buy'. Motilal Oswal Securities is 'Neutral' on the scrip while Sharekhan has 'Sell' rating on the stock. A few analysts have price targets in Rs 700-840 range. The average target price on the counter stands at Rs 744.
JSW Steel reported nearly three-fold surge in profit at Rs 2,428 crore for the June quarter compared with Rs 839 crore in the same quarter last year. Total revenue for the quarter climbed to Rs 42,213 crore from Rs 38,086 crore YoY. Ebitda margin came in at 16.7 per cent. Steel Sales for the quarter stood at 5.71 million tonne, up 27 per cent YoY (down 13 per cent) QoQ, impacted by channel de-stocking, with exports also being impacted by delayed loading due to the cyclone on the western coast of India towards the end of the quarter.
Motilal Oswal Securities said JSW Steel's volumes are likely to be aided by a pickup in domestic demand and the benefits of low coking coal costs are expected to accrue in Q2FY24, noting that JSW Steel is well-placed.
The stock trades at 6.5 times FY25 EV/Ebitda and 2.2 times FY25E price to book value, making Motilal Oswal Securities believe the valuation fully prices in the positive factors. This brokerage has a target of Rs 730 on the stock. The stock closed Thursday's session at Rs 788.20.
Geojit Financial Services cited recent positive developments including stable demand, capacity expansion, lower coking coal costs, and range-bound steel prices with the completion of channel destocking and reduced steel production in China. But it felt that near-term challenges like impending correction in iron ore prices, unpredictable weather conditions, and site maintenance shutdowns persists.
"However, we believe the positive developments will support growth in long-term. Hence, we upgrade our rating to 'HOLD' on the stock with a revised target price of Rs 842 based on 7 times FY25E EV/Ebitda," the brokerage said.
JSW Steel's consolidated Ebitda was significantly higher than Street. The beat was primarily driven by higher than expected realisations and significantly improved subsidiary performance, said JM Financial. Strong growth pipeline and increased focus on cost efficiency augurs well for the company," it said while suggesting a target of Rs 800 on the stock.
ICICI Securities has a target of Rs 775 while BoB Capital Markets sees it at Rs 840.
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