JSW Steel Share Price Target

JSW Steel’s stock outlook presents a mixed picture of promising growth potential tempered by market uncertainties. Analysts foresee JSW Steel Share Price Target an upward trajectory for the company’s shares, with projections for 2025 ranging from ₹1,154.49 to ₹1,510.11, representing a substantial increase from the current ₹891.65 valuation.

Looking further ahead, optimistic forecasts suggest the stock could climb to ₹2,405 by 2030, underscoring a bullish long-term perspective. However, prudent investors should consider various risk factors, such as industry competition, fluctuating raw material costs, and evolving environmental policies, which may influence the company’s financial performance.

The current price-to-earnings ratio of 44.67, exceeding the sector average, hints at a possible short-term overvaluation. Nevertheless, JSW Steel’s robust market presence and the steel industry’s growth prospects make it a compelling option for those with a long-term investment horizon, despite the inherent challenges.

1. About the Company

JSW Steel, a flagship company of the JSW Group, is one of India’s leading integrated steel manufacturers. Founded in 1982, it has grown to become the country’s second-largest private sector steel producer.

The company operates state-of-the-art steel manufacturing facilities in Karnataka, Tamil Nadu, and Maharashtra, with a combined installed capacity of 28.5 million tonnes per annum (MTPA).

Known for its technological prowess and innovation, JSW Steel produces a wide range of products, including hot rolled coils, cold rolled coils, galvanized products, and value-added items like auto-grade and electrical steel.

The company has a strong focus on sustainability and has set ambitious targets to reduce its carbon footprint.JSW Steel has a significant presence in both domestic and international markets, exporting to over 100 countries with a strong foothold in Europe, the Middle East, and North America.

Its strategic location near ports gives it a competitive advantage in logistics and export capabilities.

JSW Steel website

2. Products

JSW Steel offers a diverse range of steel products catering to various industries:

1. Flat Products:
   • Hot Rolled Coils: Used in automotive, construction, and engineering sectors
   • Cold Rolled Coils: Ideal for appliances, automotive, and packaging industries
   • Galvanized Products: Corrosion-resistant steel for construction and automotive applications
   • Color Coated Products: Pre-painted steel for roofing and cladding
2. Long Products:
   • TMT Rebars: High-strength steel bars for construction
   • Wire Rods: Used in manufacturing fasteners, springs, and welding electrodes
3. Special Products:
   • Electrical Steel: Used in transformers and motors
   • Auto-grade Steel: High-strength steel for automotive applications
   • API Grade Steel: For oil and gas pipelines
4. Value-Added Products:
   • JSW Steel’s focus on value-added products (VAP) has been increasing, with the VAP share standing at 64% in Q1FY25.
   • The company aims to maintain the VAP share above 50% even after ongoing expansions.

Product Analysis:

• The diverse product mix allows JSW Steel to cater to multiple industries, reducing dependence on any single sector.
• The focus on value-added products contributes to higher margins and profitability.
• The company’s emphasis on auto-grade and electrical steel positions it well in high-growth sectors.

3. Results and Performance

Key Financial Information (All amounts in Crores INR):

Particulars	FY2024	FY2025E	FY2026E
Sales	175,000	188,400	220,200
EBITDA	28,200	32,000	43,300
Adj. PAT	9,000	11,100	18,700
EBITDA Margin (%)	16.1	17.0	19.7
Adj. EPS (INR)	36.8	45.6	76.6
EPS Growth (%)	148.7	23.8	68.1
Net D:E	0.9	0.8	0.6
RoE (%)	12.4	13.4	19.3
RoCE (%)	8.6	9.4	12.9

Financial Analysis:

• JSW Steel is expected to show strong growth in sales and profitability over the next two years.
• The EBITDA margin is projected to improve from 16.1% in FY2024 to 19.7% in FY2026, indicating better operational efficiency.
• The company’s debt-to-equity ratio is expected to improve, showing better financial health.
• Return on Equity (RoE) and Return on Capital Employed (RoCE) are both projected to increase significantly, indicating improved profitability and efficient use of capital.

4. 52-week Stock Summary and Past 12-month Stock Performance

52-week Stock Summary:

• 52-Week Range: INR 723 – INR 955 (current price)

Past 12-month Stock Performance (Monthly Open, High, Low, and Close):

Here is the data presented in a tabular format:

Here is the data presented in a tabular format:

Date	Open	High	Low	Price	Change %
Dec-24	964.90	1,023.50	895.60	901.50	-6.68%
Nov-24	969.90	1,018.95	928.05	966.00	0.24%
Oct-24	1,029.00	1,063.00	909.00	963.65	-6.45%
Sep-24	941.10	1,032.90	911.70	1,030.05	9.45%
Aug-24	937.55	968.90	854.15	941.10	1.38%
Jul-24	935.00	959.40	862.40	928.25	-0.35%
Jun-24	912.00	949.40	823.80	931.50	5.79%
May-24	883.00	928.95	830.00	880.55	-0.19%
Apr-24	838.00	914.00	833.20	882.20	6.26%
Mar-24	804.25	847.00	761.75	830.20	3.76%
Feb-24	822.00	850.00	790.00	800.10	-2.27%
Jan-24	880.25	884.80	784.00	818.65	-7.00%

5. JSW Share Price Targets

Predicted share price targets based on financials and estimated financials:

Year	Target Price (INR)
JSW Share price Target 2024	1,100
JSW Share price Target 2025	1,250
JSW Share price Target 2026	1,450
JSW Share price Target 2027	1,650
JSW Share price Target 2028	1,850
JSW Share price Target 2029	2,050
JSW Share price Target 2030	2,300
JSW Share price Target 2035	3,500
JSW Share price Target 2040	5,000

Reasons for expected upside:

1. Capacity Expansion: JSW Steel is on track to achieve its target of 50MTPA capacity by FY31, which will drive volume growth and market share.
2. Improving Financials: Projected improvement in EBITDA margins, RoE, and RoCE indicate better profitability and operational efficiency.
3. Focus on Value-Added Products: The company’s emphasis on maintaining a high share of value-added products (>50%) will contribute to better margins.
4. Robust Domestic Demand: Expected strong growth in Indian steel consumption, driven by infrastructure development and economic growth.
5. Debt Reduction: The company’s efforts to reduce its debt-to-equity ratio will improve financial health and reduce interest costs.
6. Technological Advancements: JSW Steel’s focus on innovation and adoption of new technologies is likely to improve productivity and reduce costs.
7. Global Market Expansion: The company’s efforts to expand its presence in international markets could drive long-term growth.
8. Government Initiatives: Supportive government policies for the steel sector in India could provide additional tailwinds.

6. Key Management Personnel

1. Sajjan Jindal – Chairman and Managing Director
2. Seshagiri Rao – Joint Managing Director and Group CFO
3. Dr. Vinod Nowal – Deputy Managing Director
4. Jayant Acharya – Director (Commercial & Marketing)
5. Rajeev Pai – Chief Financial Officer
6. Prabodh Agrawal – Chief Strategy Officer

Leadership:

7. Management Commentary

Key points from the management commentary:

1. Capacity Expansion: The management is confident about achieving the target of 50MTPA capacity by FY31. The company is on track with its expansion plans, including the 5MTPA integrated steel plant at Vijayanagar.
2. Value-Added Products: The management aims to maintain the share of value-added and special products (VASP) above 50% even after ongoing expansions.
3. Domestic Demand: The company expects robust domestic steel demand, driven by significant capex towards infrastructure development.
4. Near-term Challenges: The management acknowledges that margins in the near term could be under pressure due to lower realizations, which would more than offset the decline in input costs.
5. Long-term Outlook: The management remains optimistic about the long-term prospects, expecting double-digit revenue growth in FY26E owing to price recovery and capacity ramp-up.
6. Raw Material Security: JSW Steel currently meets around 35% of its iron ore needs through captive mines and plans to increase this in the future.

8. Dividend History

Financial Year	Dividend Per Share (INR)	Dividend Payout (%)
FY2024	7.3	20.2
FY2025E	3.5	7.70
FY2026E	3.5	4.60

9. Corporate Action History

Notable corporate actions:

1. Capacity Expansions:
   • Commissioning of Hot Strip Mill at Vijayanagar in March 2024.
   • Ongoing expansion of Bhushan Power & Steel Limited (BPSL) from 3.5MTPA to 5MTPA.
2. New Projects:
   • Construction of a new 0.12MTPA color coating line in Jammu & Kashmir, expected to be commissioned in Q2FY25.
3. Capital Expenditure:
   • The company has outlined a capex plan of INR 644 billion over the next three years.
4. Acquisitions:
   • While specific acquisitions are not mentioned, the company’s growth strategy includes both organic and inorganic expansion.
5. Sustainability Initiatives:
   • JSW Steel has been focusing on reducing its carbon footprint, though specific actions are not detailed in the provided information.

10. Key Conference Points

Key points discussed in recent conferences:

1. Capacity Expansion Plans: Details on the progress of ongoing expansions and the roadmap to achieve 50MTPA capacity by FY31.
2. Value-Added Products Strategy: Discussion on maintaining the share of value-added products above 50% and its impact on margins.
3. Market Outlook: Analysis of domestic and global steel demand, pricing trends, and their impact on JSW Steel’s performance.
4. Raw Material Security: Plans to increase captive iron ore production and strategies to secure other key raw materials.
5. Financial Performance: Detailed discussion on recent financial results, margin trends, and future projections.
6. Sustainability Initiatives: Updates on the company’s efforts to reduce carbon footprint and adopt green technologies.
7. Export Strategy: Plans to expand presence in international markets and mitigate risks associated with global trade dynamics.
8. Government Policies: Impact of recent government initiatives on the steel sector and JSW Steel’s operations.

11. Top 10 Shareholders

Shareholder	Ownership Percentage
Promoter Group	44.8%
Foreign Institutional Investors (FII)	25.9%
Domestic Institutional Investors (DII)	11.0%
Others (including retail investors)	18.3%

12. Peers

• Tata Steel
• Hindalco
• Jindal Steel
• Lloyds Metals

13. FAQs

1. Q: What is JSW Steel’s current steel production capacity?
   A: JSW Steel’s current installed capacity is 28.5 million tonnes per annum (MTPA).
2. Q: What is JSW Steel’s target capacity by FY31?
   A: JSW Steel aims to reach a capacity of 50MTPA by FY31.
3. Q: What percentage of JSW Steel’s iron ore needs are met through captive mines?
   A: Currently, JSW Steel meets around 35% of its iron ore needs through captive mines.
4. Q: What is the share of value-added products in JSW Steel’s total sales?
   A: As of Q1FY25, the share of value-added products (VAP) stood at 64% of total volumes.
5. Q: What is JSW Steel’s planned capital expenditure for the next three years?
   A: JSW Steel has outlined a capex plan of INR 644 billion over the next three years.
6. Q: How is JSW Steel addressing sustainability concerns in steel production?
   A: While specific details are not provided, JSW Steel has a strong focus on sustainability and has set targets to reduce its carbon footprint.
7. Q: What is JSW Steel’s dividend payout policy?
   A: Based on the projections, JSW Steel’s dividend payout ratio is expected to be around 4.6-20.2% in the coming years.
8. Q: How does JSW Steel plan to maintain its competitiveness in the global market?
   A: JSW Steel focuses on technological innovation, capacity expansion, and increasing the share of value-added products to maintain its competitiveness.

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