JSW Steel - Muted Steel Prices A Near-Term Headwind; Motilal Oswal Reiterates 'Buy', Revises Target Price

Motilal Oswal Report

The domestic steel demand is expected to be robust, driven by significant capex toward infrastructure development. The capacity expansion of JSW Steel Ltd. is on track, positioning it well to capitalize on emerging opportunities.

We expect +9% YoY (26mt) volume growth in FY25 and +8% YoY (28mt) in FY26E.

The metal prices in both domestic and global markets have corrected significantly. Domestic HRC and CRC declined 4-5% QoQ in Q2 FY25. Moreover, global steel prices are trending downward due to muted global demand and Chinese oversupply.

Margins in the near-term could be under pressure due to lower realizations, which would more than offset the decline in input costs.

Going ahead, we expect a double-digit revenue growth in FY26E owing to price recovery and capacity ramp-up, which would drive the Ebitda close to ~Rs 14,500/tonne.

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