Nuvama still has a "buy" rating on the stock, but has reduced its price target from ₹1,400 apiece to ₹1,264 per share. The revised price target still implies
an upside potential of 24.8% from its previous closing price.
Amid a double whammy, which is a fall in steel prices and higher cost of production, JSPL's steel spreads are likely to weaken, but bottom in the third quarter, Nuvama wrote in its note.
The brokerage believes that JSPL's earnings before interest tax depreciation and amortisation (EBITDA) per tonne will fall by ₹1,800 per tonne sequentially in the third quarter to ₹8,200.
JSPL has capacity in place, which will help deliver an estimated 17% compound annual growth rate (CAGR) over FY25-28, according to Nuvama. Higher steel prices should drive an EBITDA CAGR of 28% over FY25-28, the brokerage added further.
Nuvama said it has cut JSPL's EBITDA estimates for FY26, FY27 and FY28 by 16%, 13% and 7%, respectively, to factor in lower steel prices.
However, the EBITDA/tonne will log an expansion of ₹3,000 to ₹4,000 per tonne in FY27 and FY28 over FY26, profiting from higher volume, realisation and cost reductions.
Shares of JSPL are trading 0.9% lower at ₹1,003.6. The stock is up 7% so far in 2025.
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