Nomura has initiated buy ratings on JSW Steel and JSPL, with target prices set at Rs 1220 and Rs 1200, respectively, expecting upto 18% upside in the stock prices. The brokerage highlights robust domestic demand, continued deleveraging, and global monetary easing as key factors supporting Indian steel majors.
Nomura expects domestic hot-rolled coil (HRC) prices to remain range-bound in the second half of FY25, with a marginal recovery anticipated in FY26. The firm also notes that cost drivers are likely to partially offset the moderation in realizations.
Additionally, China’s HRC margins are currently trading at trough levels, and Nomura expects a recovery soon. However, the brokerage warns that weakened domestic demand, monetary tightening, and delays in expansion projects pose downside risks to their optimistic outlook.
Despite these potential challenges, Nomura remains positive about the long-term growth prospects for JSW Steel and JSPL, given their strong market positions and strategic initiatives.
