Morgan Stanley said share price may outperform the broader market over the next 60 days. The brokerage initiated a tactical call on the stock with an ‘overweight’ rating and set a price target of ₹1,300, suggesting an upside potential of 18 percent.
“We estimate that there is about an 80 percent-plus (or ‘highly likely’) probability for the scenario,” the brokerage added.
Morgan Stanley highlighted that India’s steel industry is at the beginning of a spreads expansion cycle. Domestic are expected to rise gradually as demand improves incrementally, supported by China’s anti-involution measures and favorable global macro factors. Additionally, there is optionality if safeguard duty is extended.
Against this backdrop, JSW Steel is well positioned due to its high domestic business share skewed toward flat steel. Margin expansion is expected from HRC price increases and strong volume growth. “We expect the stock to do well despite rich valuations,” Morgan Stanley said.
In its bull case, the brokerage sees a supportive global macro environment boosting steel prices and volumes in the medium term, further aided by the likelihood of safeguard duty extension. In the bear case, weaker demand-supply conditions or lower steel prices could weigh on performance. Morgan Stanley estimated the cost of equity at 12 percent, terminal ROE at 15 percent, and terminal growth at 3 percent in this scenario.
Upside risks include stronger-than-expected domestic demand, faster project ramp-ups, and higher steel prices, while downside risks cover weaker price or volume momentum, delays in new capacity commissioning, and higher-than-expected iron ore costs from auctioned mines.
JSW Steel Q1 Results
JSW Steel reported a consolidated net profit of ₹2,184 crore for Q1FY26, up 158 percent year-on-year from ₹845 crore in Q1FY25. Sequentially, profit rose 45 percent from ₹1,503 crore in Q4FY25.
Revenue from operations stood at ₹43,147 crore, up 0.5 percent year-on-year but down 3.7 percent sequentially. Total expenses for the quarter fell 3.3 percent year-on-year to ₹40,325 crore and were down 6.3 percent sequentially, reflecting improved cost efficiency.
JSW Steel Stock Performance
The has gained 16 percent in the last one year, 9.5 percent in six months, and 1 percent over the past three months. Over five years, JSW Steel has delivered returns, rising nearly 300 percent.
The stock hit its 52-week high of ₹1,112 in September last year and its 52-week low of ₹879.60 in January 2025.
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