Accumulate JSW Steel; target of Rs 1068: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on JSW Steel with a target price of Rs 1068 in its research report dated May 24, 2025.

Broker Research

May 27, 2025 / 13:10 IST

Accumulate

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on JSW Steel

JSW Steel (JSTL) reported inline operating performance in 4QFY25 led by lower RM, operating costs and improved subsidiaries’ performance. Cons volume grew 11% YoY aided by newly commissioned 5mtpa Jindal Vijayanagar Metallics (JVML) capacity ramp up and stable domestic demand. Average cons NSR declined 3% QoQ due to muted steel pricing affected by imports. Decline in coking coal consumption cost by USD15/t and lower iron ore costs drove operating costs lower, enabling JSTL to deliver cons EBITDA/t of Rs8,515. Std EBITDA/t of Rs8,783 was tad better than PLe of Rs8,595. Recent steel price hikes and lower coking coal cost (USD10–15/t for Q1) would drive EBITDA/t to over Rs11k in H1FY26. However, recent SC order to liquidate BPSL and possible refund delays, remain biggest hangover on the stock.

Outlook

At CMP, the stock is trading at 8.7x/7.1x EV of FY26E/FY27E EBITDA. We recommend ‘Accumulate’ at lower levels with a revised TP of Rs1,068 (earlier Rs1,150), valuing at 7.5x EV of Mar’27E EBITDA.

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