Morgan Stanley has turned more constructive on the domestic steel sector, expecting prices to expand as demand improves and global macro conditions turn favourable. The brokerage said the “China anti-involution” theme is also gaining traction, supporting a more stable pricing environment globally. As a result, it has raised its steel price estimates by 3 percent each for FY27 and FY28 and expects select steel stocks to outperform the broader India materials space over the coming months.
Within the coverage, Morgan Stanley upgraded JSW Steel to overweight with a revised target price of ₹1,300 per share. Tata Steel was also upgraded to overweight with a raised target of ₹200 per share. In addition, SAIL was upgraded to equal-weight with a revised target of ₹140 per share, while Jindal Steel & Power (JSPL) remains at equal-weight with a higher target of ₹1,150 per share.
The brokerage said improving domestic demand, combined with a favourable global macro backdrop, underpins its positive outlook for the sector. It expects JSW Steel and Tata Steel to lead the gains in the near term, while SAIL and JSPL are expected to track the broader market.
Disclaimer: The views and investment recommendations expressed above are those of Morgan Stanley. They do not represent the views of this publication. This article is for informational purposes only and is not investment advice.