Morgan Stanley noted that domestic steel prices may rise as demand strengthens, aided by China’s anti-innovation theme. Global factors like expected US rate cuts and a weaker US Dollar index add support. Further, India’s steel sector could benefit if the Finance Ministry extends safeguard duty for three years, boosting margins.
Morgan Stanley turned ‘Overweight’ on JSW Steel and Tata Steel, citing benefits from HRC price expansion and potential safeguard duty extension. It prefers JSW Steel despite higher valuations, given its stronger growth outlook and higher domestic business share, while both firms are set to gain from spread expansion.
Morgan Stanley revised its target prices for Sail and Jindal Steel & Power to Rs 140 and Rs 1,150, respectively, reflecting the brokerage’s updated outlook and anticipated performance for these steel sector leaders.
1. JSW Steel
JSW Steel Limited is primarily engaged in the business of manufacturing and sale of iron and steel products. It is an integrated manufacturer of a diverse range of steel products with its manufacturing facilities located at Vijayanagar Works in Karnataka, Dolvi Works in Maharashtra, and Salem Works in Tamil Nadu. It also has a plate and coil mill division in Anjar, Gujarat.
With a market capitalization of Rs 2.70 lakh crore, the shares were trading at Rs 1,107.95 per share, increasing around 3.26 percent as compared to the previous closing price of Rs 1,072.95 apiece.
Morgan Stanley, one of the well-known brokerages globally, has upgraded to an ‘overweight’ rating on the steel stock with a target price of Rs 1,300 apiece, indicating a potential upside of 21 percent from the previous closing price of Rs 1,072.95 per share.
2. Tata Steel
Tata Steel Limited is an India-based global steel company with an annual crude steel capacity of approximately 35 million tons per annum. The Company is primarily engaged in the business of manufacturing and distributing steel products across the globe.
With a market capitalization of Rs 2.13 lakh crore, the shares were trading at Rs 171.15 per share, increasing around 2.09 percent as compared to the previous closing price of Rs 167.65 apiece.
Morgan Stanley has upgraded the steel stock to ‘overweight’ with a target price of Rs 200, implying a 20 percent upside from the current Rs 167. The recommendation signals strong growth potential and investor confidence, highlighting expectations of robust performance and favorable market conditions in the steel sector.
Written by Abhishek Singh
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