Imagine a world without steel – no skyscrapers touching the clouds, no bridges connecting cities, and no robust vehicles ferrying people across distances. Steel is the backbone of modern infrastructure, and JSW Steel stands tall as one of India’s largest and most innovative steelmakers.
As the industry evolves with global demand shifts, government policies, and emerging technologies, JSW Steel remains a key player in shaping India’s growth story.
Let’s dive into a detailed stock research analysis of JSW Steel, covering its business segments, growth drivers, valuation insights, and potential risks.
Stock Overview
| Ticker | JSWSTEEL |
| Industry/Sector | Metals & Mining (Iron & Steel) |
| Market Cap (₹ Cr.) | 2,44,545 |
| Free Float (% of Market Cap) | 39.19% |
| 52 W High/Low | 1063.00 / 761.75 |
| P/E | 74.20 (Vs Industry P/E of 25.56) |
| EPS (TTM) | 13.49 |
About JSW Steel
JSW Steel, part of the JSW Group, is one of India’s largest steel producers and a major global player. Founded in 1982, it has expanded rapidly with state-of-the-art facilities and a capacity of over 28 MTPA, targeting 40 MTPA. Its diverse product range serves sectors like construction, automotive, and energy.
Committed to green steel initiatives, the company focuses on renewable energy and reducing its carbon footprint. As a key driver of the Make in India initiative, JSW Steel continues to lead with strategic acquisitions and innovation, contributing significantly to the nation’s infrastructure growth.
Key business segments
JSW Steel’s key segments include:
- Flat Steel Products: Used in automotive, white goods, and construction.
- Long Steel Products: TMT bars, wire rods, and structural steel for infrastructure.
- Value-added Products: Specialized steel for shipbuilding, aerospace, and renewable energy.
- International Operations: Presence in the US, Europe, and Africa through acquisitions.
- Mining: Captive mines in Karnataka and Odisha for raw material security.
Primary growth factors for JSW Steel
Several factors contribute to JSW Steel’s growth trajectory:
- Infrastructure push: India’s ambitious infrastructure projects, including roads, bridges, and urban development, drive steel demand.
- Government policies: The ‘Make in India’ initiative, PLI schemes for manufacturing, and increased capital expenditure boost steel consumption.
- Global expansion: JSW’s strategic acquisitions in the US and Europe enhance its global market share and reduce dependency on domestic demand.
- Sustainability & Green steel: Focus on reducing carbon footprint and investing in green steel initiatives positions JSW well for the future.
- Backward integration: Access to captive iron ore mines ensures stable raw material supply, reducing cost volatility.
Detailed competition analysis for JSW Steel
Key Financial Metrics – FY 24;
| Company | Revenue(₹ Cr.) | EBITDA(₹ Cr.) | EBITDA Margin (%) | PAT(₹ Cr.) | PAT Margin (%) | P/E (TTM) |
| JSW Steel | 175006.00 | 28236.00 | 16.13% | 9145.00 | 5.23% | 74.20 |
| TATA Steel | 229170.78 | 22305.90 | 9.73% | -4851.63 | -2.12% | 68.88 |
| Jindal Stainless Ltd. | 38562.47 | 4704.29 | 12.20% | 2640.35 | 6.85% | 21.48 |
| SAIL | 105378.33 | 11491.31 | 10.58% | 2628.06 | 2.49% | 19.47 |
| APL Apollo Tubes | 18118.80 | 1192.17 | 6.58% | 732.44 | 4.04% | 60.06 |
Key insights on JSW Steel
- Achieved a 13% revenue CAGR over 10 years, 16% over 5 years, and 30% over the last 3 years, showcasing strong growth.
- EBITDA margins have ranged between 11% and 16% over the last three years, reflecting stable profitability.
- Profit has grown at a 38% CAGR over the last 10 years, driven by operational efficiencies and market demand.
- The debt-to-equity ratio has significantly improved from 11.63 in FY20 to 1.11 in FY24, enhancing financial stability.
- Maintains a healthy dividend payout of 25.1%, reinforcing its commitment to shareholder returns.
- Targeting 50 MTPA production capacity by 2030, supporting long-term expansion.
Recent financial performance of JSW Steel for Q3 FY25
| Metric | Q3 FY24 | Q2 FY25 | Q3 FY25 | QoQ Growth (%) | YoY Growth (%) |
| Revenue (₹ Cr.) | 41940.00 | 39684.00 | 41378.00 | 4.27% | -1.34% |
| EBITDA (₹ Cr.) | 7180.00 | 5437.00 | 5579.00 | 2.61% | -22.30% |
| EBITDA Margin (%) | 17.12% | 13.70% | 13.48% | -22 bps | -364 bps |
| PAT (₹ Cr.) | 2466.00 | 466.00 | 713.00 | 53.00% | -71.09% |
| PAT Margin (%) | 5.88% | 1.17% | 1.72% | 55 bps | -416 bps |
| Adjusted EPS (₹) | 9.90 | 1.44 | 2.94 | 104.17% | -70.30% |
JSW steel financial highlights (Q3 FY25)
- Revenue increased 4% QoQ, driven by 10% QoQ volume growth, despite a 5% QoQ decline in realizations due to falling steel prices.
- EBITDA rose 3% QoQ to ₹56bn, though EBITDA per tonne declined 6.3% QoQ to ₹8,314, impacted by lower realizations, higher iron ore costs, and a reduced mix of captive iron ore.
- Weak international operations with the US operations (Ohio & Texas) reporting a loss of ~$17 million, primarily due to lower market realizations and sequentially lower Italian operations with EBITDA at ~€1.9 million.
- Capex spending was ₹3,087 crore in Q3 FY25 and ~₹11,000 crore for 9M FY25, with the company on track to achieve 50 MTPA capacity by FY30. The 5 MTPA Vijayanagar expansion was completed, bringing total India capacity to 34 MTPA.
- An exceptional item of ₹103 crore was recorded due to the forfeiture of a performance guarantee linked to the surrender of Banai & Bhalumuda Coal Block.
- Net debt reduced by ₹18bn QoQ to ₹809bn, supported by improved cash flow and working capital release.
Business Highlights
- Crude steel production in Q3 FY25 was 7.03 MTPA, up 2% YoY and 4% QoQ.
- Steel sales reached 6.71 MTPA, up 12% YoY, with domestic sales rising 14% YoY.
- India’s net sales realization (NSR) declined by ~₹1,800 per tonne QoQ, reflecting price corrections.
Industry highlights
- India’s crude steel production grew 3.5% YoY in Q3 FY25 to 37.38 MTPA.
- Steel consumption increased 6.8% YoY to 38.46 MTPA.
- India remained a net steel importer, with net imports doubling to 3.6 MTPA in 9M FY25.
Company valuation insights – JSW Steel
JSW Steel trades at a TTM P/E of 74.20, above the industry average of 25.56, reflecting strong growth expectations. The stock has gained 28.3% in the past year, outperforming the Nifty 50’s 1.7% rise.
Despite metal price pressures, JSW Steel’s aggressive expansion plans aim for 8-10% YoY volume growth over FY26-27, with EBITDA expected to grow at a ~15% CAGR.
At ₹1,001, it trades at 9.7x EV/EBITDA. Applying an 8x multiple to FY26E EBITDA of ₹35,481 crore, the target price is ₹1,140, offering a 14% upside. Strong growth, deleveraging, and expansion plans bolster its long-term outlook.
Major risk factors affecting JSW Steel
No investment is without risks, and JSW Steel is no exception:
- Cyclical industry: Steel demand is highly cyclical, dependent on global economic trends and industrial activity.
- Raw material price volatility: Fluctuations in iron ore and coking coal prices can impact margins.
- High debt: Although manageable, JSW Steel’s debt remains a concern, especially in high-interest rate environments.
- Global competition: Competition from Chinese and other international steelmakers poses pricing and market share risks.
- Regulatory changes: Environmental regulations and carbon taxes could impact future profitability.
Technical analysis of JSW Steel share
JSW Steel is trading within an ascending channel, with resistance at ₹1,080. A breakout above this could push it toward ₹1,140. The stock recently gained 2.94% after a cup-and-handle breakout on March 5, signalling bullish momentum.
RSI at 58.66 indicates neutral territory, while a positive relative strength of 0.08 shows outperformance. The ADX at 26.15 suggests a strong trend, and the MACD at 16.26 remains positive. With the stock above key moving averages, the technical outlook supports further gains.
RSI: 58.66 (Neutral)
ADX: 26.15 (Trending)
Resistance: ₹1,080
Support: ₹980
JSW Steel stock recommendation
Current Stance: Buy with a target price of ₹1,140 (12-month horizon); near-term price volatility may persist, but long-term growth drivers remain intact.
Why Buy Now?
Volume Growth: Projected 8-10% YoY growth for FY26-27, driven by strong domestic demand.
Capacity Expansion: Targeting 50 MTPA by FY30, with Vijayanagar adding 5 MTPA.
Stable Margins: Cost efficiencies and captive raw materials to support ~15% EBITDA CAGR by FY27.
Deleveraging: Strong free cash flows to reduce debt and fund expansions, ensuring financial stability.
Portfolio Fit
JSW Steel’s growth strategy, operational efficiency, and capital discipline make it a strong long-term bet. As a leading producer with a diverse portfolio, it’s well-positioned to benefit from rising infrastructure demand. With solid volume growth, capacity expansion, and improving margins, it offers a compelling investment opportunity in the metals sector.
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- Infrastructure Boom: Government spending on railways, roads, and housing to boost steel demand.
- PLI Scheme: ₹6,322 crore incentives to drive specialty steel production and exports.
- Sustainability: Focus on green steel and renewable energy for carbon neutrality.
- Manufacturing Growth: Rising demand from defense, auto, and capital goods sectors.
- Trade Support: Import duty changes, logistics upgrades, and incentives to enhance competitiveness.
Final thoughts
Imagine a future where India’s infrastructure booms, electric vehicles dominate the roads, and renewable energy plants require top-quality steel. In this scenario, companies like JSW Steel stand at the forefront, supplying the essential materials needed to fuel this transformation.
For an investor, JSW Steel presents a compelling mix of strong fundamentals, growth potential, and industry leadership. However, the cyclical nature of the steel industry means timing is key. If you believe in India’s long-term growth story and the global steel demand cycle, JSW Steel could be a valuable addition to your portfolio.
