CLSA has retained its Underperform rating on JSW Steel, with a target price of ₹890, implying a 15% downside from the current market price of ₹1,044.80. While the company’s Q1FY26 consolidated EBITDA was largely in line with estimates, CLSA remains cautious on the stock given its valuation and broader margin risks.
The brokerage noted that standalone EBITDA per tonne rose sharply by ₹1,835 sequentially to ₹10,618, supported by higher steel prices and lower coking coal costs. This led to a significant boost in quarterly profitability.
Looking ahead to Q2FY26, CLSA expects earnings to be supported by continued softness in coking coal costs, even though steel prices have seen some correction. Additionally, the foreign exchange and shutdown-related costs that impacted Q1 are unlikely to recur, potentially offering a more stable operating environment.
However, the brokerage remains cautious and believes that future performance will heavily depend on macro triggers and progress on JSW Steel’s expansion projects. Given the current price levels and limited near-term re-rating potential, CLSA maintains its negative stance despite the operational improvements.
Disclaimer: The brokerage view is based on publicly available research and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
