Morgan Stanley has upgraded several steel sector stocks, reflecting a positive shift in market sentiment driven by recent economic stimulus measures from China. JSPL has been upgraded to overweight (OW) from equal-weight (EW), with the target price raised to Rs 1200 from Rs 970. JSW Steel has also been upgraded to OW from EW, with its target price increased to Rs 1150 from Rs 895.
Tata Steel has seen an upgrade to equal-weight (EW) from underweight (UW), with its target price revised to Rs 175 from Rs 135. Although SAIL remains underweight, its target price has been increased to Rs 125 from Rs 105. Morgan Stanley cites improved domestic inventory digestion and lower risks of imports as factors that should support steel prices and spreads in the near term.
The brokerage expects these stocks to perform well over the next few months, driven by these favorable conditions. The anticipated recovery in the steel sector is expected to benefit from both domestic and international market dynamics.
