Stocks To Buy: The three steel names that Motilal Oswal is betting on

Brokerage house Motilal Oswal Financial Services (MOSL) remains constructive on the steel sector, favouring companies with strong balance sheets, clear growth visibility and improving margins, while staying

cautious on players facing near-term execution and leverage challenges.

Against this backdrop, the brokerage prefers JSW Steel, Tata Steel and Jindal Steel as its top ‘BUY’ ideas, according to its note on Friday, January 16.

Among its top picks, JSW Steel is Motilal Oswal’s preferred large-cap play, supported by a capacity-led volume growth strategy, cost leadership driven by raw material security and operational efficiencies, and an increasing share of value-added steel.

The brokerage expects margins to recover to around 20% in financial year 2027-2028 on the back of a safeguard-duty-led price recovery, while strong operating cash flows are likely to fund ongoing capex despite its net debt / EBITDA of about 3x.

Motilal Oswal has set a target price of ₹1,360 for JSW Steel, implying an upside potential of 15% from Wednesday's closing level.

Tata Steel

Tata Steel is viewed as a turnaround story, underpinned by robust domestic operations and benefits from safeguard duties. Motilal Oswal also expects a gradual improvement in the company's European operations to support its consolidated earnings, with healthy operating cash flows enabling capex without significant balance sheet stress.

The brokerage’s target price of ₹220 implies an upside potential of about 16% from the Wednesday closing price.

Jindal Steel

Motilal Oswal's third "Buy" recommendation, Jindal Steel, is expected to benefit from aggressive capacity expansion, a richer value-added product mix and the ramp-up of captive coal, which should drive volume and margin expansion.

The balance sheet remains comfortable, with leverage expected to stay modest even amid expansion, Motilal Oswal wrote in its note.

The brokerage has a price target of ₹1,250 suggests an upside of about 20% from the Wednesday closing price.

Metal stocks have seen a sharp rally at the start of the year. Shares of Tata Steel are up 6% so far in 2026, SAIL are up 3% and continue to remain in the F&O ban, while shares of Jindal Steel have remained little changed so far this year.