Synopsis:
The Indian metal sector is poised for growth, with JSW Steel, Jindal Steel, and Indian Metals & Ferro Alloys showing strong upside potential. Robust domestic demand, global supply tightening, capacity expansions, and strategic diversification are expected to drive earnings and margins, making these stocks attractive picks for investors through FY27–28.
The Indian metal sector gained investor attention as select stocks showed strong potential, with brokerage firms highlighting improving medium-term earnings visibility and robust demand trends.
Stocks in the steel and ferrochrome segments are seen poised for growth, supported by both domestic consumption and global supply dynamics. Investor sentiment has turned positive, factoring in capacity expansions and policy measures that could sustain momentum well into FY27–28.
Nomura on JSW Steel & Jindal Steel and Power
JSW Steel and Jindal Steel and Power Ltd. emerged as key focus stocks following brokerage guidance. JSW Steel, with a target price raised by seven percent, and Jindal Steel, with a six percent increase, are expected to benefit from strong domestic demand and favorable global trends, according to Nomura. The Indian steel industry continues to enjoy resilient consumption, driven by infrastructure projects, manufacturing growth, and steady end-user demand.
Jindal Steel, valued at Rs. 1,05,742.33 crore, opened at Rs. 1,026.05 and climbed from its previous close of Rs. 1,032.60 to an intraday high of Rs. 1,040.45, reflecting a gain of around 0.75 percent.
For Jindal Steel, Nuvama has raised the target price to Rs. 1,150, reflecting a potential upside of 12.08 percent from today’s open price, rolling forward valuations to FY28 and raising the target one-year EV/EBITDA multiple to seven times.
While volume estimates for FY26 and FY27 were lowered by twenty-three percent and fourteen percent to align with management guidance, the brokerage expects earnings to improve due to a stronger product mix and cost efficiencies from the company’s upcoming capacity expansion.
JSW Steel, with a market capitalization of Rs. 2,74,942.39 crore, opened at Rs. 1,121.90, rising from its previous close of Rs. 1,117.60 to an intraday high of Rs. 1,127.40, marking an increase of approximately 0.88 percent.
For JSW Steel, Nuvama has raised the target price to Rs. 1,300, reflecting a potential upside of 15.87 percent from today’s open price. The brokerage anticipates steady earnings growth even after reducing FY26 and FY27 EBITDA estimates by three percent and two percent, respectively, citing elevated domestic iron ore prices.
The brokerage highlighted that its FY27 and FY28 EBITDA projections are six to eight percent higher than Bloomberg consensus. JSW Steel is currently valued at 9.4 times one-year forward EV/EBITDA.
Nomura also pointed to the global landscape, noting China’s “anti-involution” measures aimed at curbing excess steel production are having an impact. Crude steel output has been trending near the lower end of the five-year average since April 2025, compared with March’s peak levels.
The brokerage forecasts a nine percent year-on-year decline in Chinese steel production from August to December 2025, which could support margins for hot-rolled coil. However, China’s property market remains weak, with August 2025 housing starts hitting a ten-year low and residential building prices falling twenty percent month-on-month. Nomura expects incremental policy support around the Communist Party’s 4th Plenary Session in October, potentially boosting steel prices further.
“India’s domestic demand growth remains intact, and with China implementing tighter production controls, we see a constructive setup for steel prices and margins,” Nomura said, underlining its positive outlook for JSW Steel and Jindal Steel.
Across its steel coverage universe, the brokerage projects an EBITDA CAGR of 25–27 percent between FY25 and FY28, positioning Indian steelmakers to benefit from both domestic expansion and tighter global supply.
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Anand Rathi on Indian Metals and Ferro Alloys
Indian Metals and Ferro Alloys Ltd., with a market capitalization of Rs. 6,035.04 crore, opened at Rs. 1,125, rising from the previous close of Rs. 1,114.10 to a high of Rs. 1,133, representing an intraday increase of roughly 0.81 percent.
Meanwhile, Anand Rathi has initiated coverage on Indian Metals and Ferro Alloys Ltd. (IMFA) with a ‘Buy’ rating and a target price of Rs. 1,510 with a potential upside of 34.2 percent. The brokerage highlighted that IMFA is India’s largest fully integrated value-added ferrochrome producer and is expanding its production capacity by 35 percent, from 284,000 tonnes to 384,000 tonnes, with a greenfield plant at Kalinganagar expected to come online by mid-2026. In addition, the company has received in-principle approval for a further 200,000-tonne capacity expansion.
IMFA’s growth is underpinned by rising stainless steel demand and strategic capacity expansion. More than eighty percent of ferrochrome demand originates from the industry itself, and the company’s diversification strategy is expected to generate Rs. 300 crore in annual revenue with an EBITDA margin of eight–ten percent. Anand Rathi noted that the company is also leveraging its Therubali land bank and raw material handling infrastructure to establish a 120kL per day ethanol plant.
The brokerage expects IMFA to more than double its installed ferrochrome capacity to 584,000 tonnes in two phases, solidifying its position as the largest domestic producer. With limited ferrochrome imports, higher costs for non-integrated players, and potential export taxes on chrome ore from South Africa, production from Kalinganagar is likely to be directed primarily toward domestic consumption.
Rising stainless steel usage, backed by urbanisation, government initiatives in manufacturing and infrastructure, and demand from sectors like automotive and railways, further supports IMFA’s growth prospects.
Written By Manan Gangwar
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