JSW Steel shares hit record high, approach Rs 1,100 mark; more upside ahead?

Shares of JSW Steel Ltd hit their record high on Monday amid a rally in the broader market. Shares of JSW Steel climbed over 1 % to a high of Rs 1072.10 on BSE. In early deals, a total of 0.11 lakh shares of the firm changed hands amounting to a turnover of Rs 1.18 crore on BSE. Market cap of the firm stood at Rs 2.61 lakh crore.

JSW Steel stock has clocked 29.30% returns in a year. This year, the stock has gained 16%. In terms of technicals, the relative strength index (RSI) of the stock stands at 73.2, signaling it's trading in the overbought zone.

JSW Steel stock is trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day, 150 day and 200 day moving averages.

HDFC Securities has a buy call on the stock with a price target of Rs 1,080. The brokerage said it expects steel prices to benefit from expected implementation of safeguard duty on imports from China and other FTA countries. "We estimate the firm will deliver 9/13% volume/EBITDA CAGRs during FY24-27E, riding on production ramp-up, expected pricing recovery and various efficiency improvement projects."

"We maintain a BUY rating and a target price of INR 1,080/share, valuing it at 8x FY27E consolidated EBITDA. JSW Steel has traded at a similar mean multiple in the past five years. We have also ascribed 50% value to the FY27E CWIP and long-term investments to arrive at our fair value," said the brokerage

Brokerage Motilal Oswal has a price target of Rs 1,150 on the stock. The brokerage expects the metal major to record strong cash flows, which can be utilized to fund the expansion plan and for deleveraging.

It expects the firm to clock a 8-10% YoY volume growth for FY26-27E from expansion despite a fall in short-term metal price.

"With stable input costs and strong realizations, EBITDA is expected to grow at a ~15% CAGR by FY27E, ensuring strong cash flows for expansion and deleveraging. The company aims to raise iron ore production to 15mtpa in Karnataka and 30mtpa in Odisha by FY26," said Motilal Oswal.

The brokerage expects JSTL to generate strong cash flow, which can be utilized to fund the expansion plan and for deleveraging.

"JSTL trades at 6.7x FY27E EV/EBITDA and we maintain our FY26/FY27 estimates. We reiterate our BUY rating on the stock with a TP of Rs 1,150 (premised on 7.5x EV/EBITDA on FY27 estimate," said Motilal Oswal.

Emkay Global has a price target of Rs 1,100 with an 'Add' call on JSW Steel.

In Q3 of this fiscal, the steel major JSW Steel reported a 71% year-on-year fall in its consolidated net profit at Rs 719 crore in the third quarter on an exceptional charge of Rs 103 crore. Revenue from operations in Q3 fell 1% year-on-year to Rs 41,378 crore compared to Rs 41,940 crore in the corresponding period of last year.