Jefferies has reiterated its buy rating on JSW Steel, assigning a target price of ₹1,400, which represents an upside of nearly 22% from the current market price of ₹1,144. The brokerage views the company’s decision to transfer its subsidiary Bhushan Power & Steel (BPSL) into a 50:50 joint venture with JFE Steel as broadly neutral in terms of earnings estimates and fair value, while delivering a significant improvement to the company’s leverage profile.
According to Jefferies, the proposed restructuring will materially strengthen JSW Steel’s balance sheet, leading to a reduction in the company’s FY27E net debt-to-EBITDA ratio from 2.4x to 1.7x. The brokerage noted that this deleveraging provides greater financial flexibility as the company proceeds with its medium-term expansion plans.
Jefferies added that the partnership is aimed at upgrading BPSL’s product mix and improving productivity by combining JSW Steel’s operational strengths with JFE’s advanced technological expertise. The collaboration is expected to support improvements in value-added steel categories while enhancing the long-term performance of the BPSL asset.
While the transaction is seen as broadly neutral to near-term EPS and fair value, Jefferies believes the structural benefits of a stronger balance sheet and technology integration justify its positive stance and higher target price.
Disclaimer: This article is based solely on the information provided and is for news reporting purposes only. It does not constitute investment advice or stock recommendations.
