Tata Steel, JSW Steel EBITDA estimates, price target cut by Jefferies but 'buy' ratings remain

Brokerage firm Jefferies has cut its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) estimates for financial year 2026-2028 and its price targets for JSW Steel Ltd

. and Tata Steel Ltd. in its latest note on Wednesday, December 10.

The EBITDA estimate for JSW Steel over financial year 2026-2028 has been cut between 4% to 15%, while for Tata Steel, the EBITDA estimate has been cut between 2% to 6% for the same timeframe.

Jefferies has also cut JSW Steel's price target to ₹1,300 from ₹1,400 earlier, while Tata Steel's price target has seen a marginal cut from ₹210 to ₹200.

However, the brokerage has maintained a "buy" recommendation on both of these stocks, but prefers Tata Steel over its peers.

Jefferies wrote in its note that the drop in Asian and Indian steel prices will pose a drag on margins in the near-term.

The brokerage though, has retained its optimism on both these companies as Asian spreads are near their lowest levels in 15 years and it expects them to recovery.

A potential reinstatement of the safeguard duty should further lift domestic steel prices, according to the brokerage.

In an interaction with CNBC-TV18 last month, Steel Secretary Sandeep Poundrik stated that a government decision on reinstating the safeguard duty is expected soon.

A safeguard duty is important currently as even though China's output is lower, exports remain on the higher side, which remain a worry, as elevated exports means more Chinese steel in the global markets, thereby pressuring prices.

The revised price targets by Jefferies imply a potential upside of 18% for JSW Steel and 25% for Tata Steel from Tuesday's closing levels.

Shares of Tata Steel are down 11% in the last one month, while those of JSW Steel are down nearly 6.5%.