The shares of one of the largest steel manufacturers in India, known for its cutting-edge technology and diverse product offerings, including flat and long steel products, are in focus upon becoming the world’s highest-valued steel company by market capitalization. It has overtaken global giants like Arcelor Mittal and Nippon Steel.
Price action
On Tuesday, the shares of JSW Steel Limited jumped upto 0.07 percent, making a High of Rs. 1074.15 per share compared to its previous closing price of Rs. 1061.10 per share.
Company Overview
JSW Steel, established in 1982, is a leading Indian multinational steel producer and a flagship company of the JSW Group. Headquartered in Mumbai, it operates an integrated steel plant in Toranagallu, Karnataka, and has expanded its presence across India and internationally with plans to increase it to 38.5 MTPA by the financial year 2025.
JSW Steel’s product portfolio includes flat and long steel products, catering to various sectors such as automotive, construction, and consumer durables. In addition to its manufacturing capabilities, the company has been acknowledged for its workplace culture.
Market Captilization compared to peers
JSW Steel, with a market capitalization of around Rs. 2.59 Crores, stands as the world’s highest-valued steel company. In comparison, Tata Steel is valued at approximately Rs. 1.95 Crores, while Steel Authority of India Limited (SAIL) has a market cap of Rs. 0.47 Crores.
Other notable peers like ArcelorMittal, the global steel giant, hold a market capitalization of over Rs. 2.24 crores, but JSW Steel’s growth and strong position in the Indian market make it a key player. JSW Steel’s diverse product portfolio, extensive production capacity, and continuous focus on innovation contribute to its market leadership and strong financial performance.
Company’s Future Outlook
The company’s outlook anticipates stabilized volumes and enhanced performance from the JVML facility in Q4, with lower costs due to reduced coking coal and iron ore prices. The recovery in government CAPEX is expected to drive steel demand, bolstering medium-term growth prospects.
Industry Performace
India’s steel production rose by 3.5 percent to 37.38 million tons in Q3 FY’25, while steel consumption grew by 6.8 percent to 38.46 million tons, showing a slowdown compared to H1’s 13.6 percent growth. A 10 percent YoY growth in steel consumption is anticipated for FY’25, driven by a recovery in government CAPEX.
Products and Innovations
The company offers a diverse range of steel products, including hot-rolled coils, cold-rolled coils, wire rods, galvanized coils, and sheets, catering to various sectors such as automotive, construction, infrastructure, and consumer durables.
Operational Highlights (Q3FY24 -25)
JSW Steel achieved its highest-ever consolidated crude steel production of 7.03 million tons in Q3, reflecting a 2 percent YoY and 4 percent QoQ increase. Steel sales grew 12 percent YoY to 6.71 million tonnes, with record domestic sales. Value-added and special product sales rose to 3.9 million tonnes, making up 60 percent of total sales.
Brokerage’s View
Brokerage firm Investec has assigned a “buy” rating to JSW Steel, setting a price target of Rs. 1,100 per share, which is near the stock’s current trading level. Here’s an overview of Investec’s future outlook on JSW Steel
Investec’s future outlook on JSW Steel:
- Targeting 51 MT capacity by 2030 for which they have already laid out a plan to get to 43 MT by 2027.
- To ensure value-added products are 50 to 60 percent of their overall mix.
- It focuses on operational efficiencies by securing raw material in both iron ore and coking coal
- Target net debt-to-EBITDA will remain below 2.5 times in the medium-term.
- 12 percent safeguard duties on flats could aid pricing by up to Rs. 3,000 per tonne
Financials
The company’s revenue declined by 1.45 percent from Rs. 42,134 crore to Rs. 41,525 crore in Q3FY24 -25. Meanwhile, Net profit declined from Rs. 2,415 crore to Rs. 717 crore during the same period.
Written by Sridhar J
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