Indian steel stocks could be poised for a sustained upcycle as tightening supply, resilient demand and protectionist trade policies support prices, according to Aditya Birla Capital. The brokerage has initiated coverage of JSW Steel and Steel Authority of India (SAIL), assigning Buy ratings to both, citing capacity expansion and margin recovery, respectively. It has assigned Add ratings to Tata Steel and Jindal Steeland initiated coverage of ArcelorMittal with a Positive view.
JSW Steel is the brokerage’s preferred long-term compounder, backed by consistent capacity additions, while SAIL offers a margin recovery opportunity.
Aditya Birla Capital has set a target price of ₹1,425 for JSW Steel, implying an 18% upside from its current market price of ₹1,220 as of 22 October. For SAIL, the brokerage has set a target price of ₹225, indicating a potential upside of 36.8% from ₹170.
Tata Steel has a target price of ₹190 against its current market price of ₹172, implying an upside of 12.7%. Jindal Steel has a target price of ₹1,075 versus ₹1,028, indicating an upside of 8.6%.
For international investors, the brokerage has initiated coverage on ArcelorMittal with a Positive view. It highlighted the company's ambition to expand its capacity in India to 40 million tonnes from the current 9 million tonnes.