Bank of America Securities has reiterated its buy rating on JSW Steel, assigning a target price of ₹1,290, citing the company’s newly announced strategic joint venture with Japan’s JFE Corporation as a key catalyst for long-term balance sheet strength. With shares currently trading around ₹1,144, the brokerage expects the transaction to materially support the company ahead of its next phase of expansion.
Under the deal, Bhushan Power & Steel (BPSL) will be transferred to the joint venture through a slump sale, with both companies holding an equal stake. BoFA Securities noted that the transaction values BPSL at 12–14x FY28E EV/EBITDA, a premium compared to covered Indian steel peers, which trade in the 7–9x range. The deal also implies an enterprise value of US$1,300 per tonne, against the broader sector’s range of US$400–1,100 per tonne.
According to the brokerage, the valuation premium reflects BPSL’s strategic importance and the potential synergies arising from the JSW–JFE partnership, particularly in high-grade and value-added steel categories.
BoFA Securities highlighted that the transaction will meaningfully deleverage JSW Steel’s balance sheet, providing the financial flexibility required as the company prepares for its next leg of capacity expansion. The improved leverage profile, combined with technological collaboration from JFE, is expected to strengthen JSW Steel’s competitive positioning.
The brokerage added that the JV marks a critical step in JSW Steel’s long-term growth strategy, giving it room to pursue expansion while reducing debt stress.
Disclaimer: This article is for news reporting purposes only and is based solely on the information provided. It does not constitute investment advice or stock recommendations.
