Steel Stocks To Buy: Nomura raises price target on its top two picks for 16% upside

Global brokerage firm Nomura sees positive signs for the steel sector, citing production cuts and the possibility of stimulus measures in China, alongside potential improvements in domestic prices.

The brokerage estimates an EBITDA CAGR of 25-27% over FY25-28F across its coverage universe.

For JSW Steel, Nomura maintains a 'Buy' rating and has raised its price target to ₹1,300, expecting steady earnings growth.

The optimism is driven by upcoming capacity expansions that align with a cyclical recovery, as well as the company's raw material backward integration, which positions it better than other integrated players.

Similarly, for JSPL, Nomura retains a 'Buy' rating and has increased the price target to ₹1,150.

The positive outlook is supported by capacity additions that will raise the share of flat products in its volume mix, enhanced raw material integration, and potential cost reductions following the commissioning of pellet and captive power plants.

On Tuesday, shares of JSW Steel are trading 0.47% higher at ₹1,122.30, while those of Jindal Steel shares are down 0.12% at ₹1,031.25.