P-Sec is bullish on JSW Steel and has maintained accumulate rating on the stock.

P-Sec research report on JSW Steel

The Company has acquired a 90% stake in the three companies which have a net capacity of 1 mtpa of plate mill, 0.55 mtpa of pipe mill and 0.35 mtpa of double jointing and coating lines and the company will have to spend close to USD 810 million and an additional USD 130 million will be required for working capital which will take the full cost to USD 940 million.

This acquis ition strategically makes a lot of sense as the company will use nearly 1 mtpa of slab which it produces and will create more value addition in its product mix. The stock is currently trading at 7.41 x FY08P earnings and 6.7x FY09P earnings.

We believe the valuations justify for a long term investment but in the short term, we do not see much upside from these levels and recommend an Accumulate on declines.