Motilal Oswal's research report on JSW Steel
JSTL is investing INR600b over the next three years to enhance steelmaking and downstream capacities, operational efficiency, and raw material resources. By Sep’27, Phase-I expansion will increase JSTL’s domestic crude steel capacity by 17% to 41.9mtpa. This phase includes major projects like Vijayanagar, BPSL and Dolvi. As of now, the 5mtpa JVML expansion has been completed, taking its total India capacity to 34mtpa. Further, a 7mtpa expansion is underway (2mtpa Vijayanagar + 5mpta Dolvi) and is targeted to be commissioned by Sep’27. Several debottlenecking projects are also planned (BPSL 0.5mtpa + Salem 0.2mtpa), which will altogether increase the capacity to 42mtpa by Sep’27. Additionally, Phase-II expansion (awaiting board approval) could increase the company’s total domestic capacity to 50mtpa by FY31.
Outlook
At CMP, JSTL trades at 7.6x FY27E EV/EBITDA. We reiterate our BUY rating on the stock with a TP of INR1,180 (premised on 8.5x EV/EBITDA on FY27 estimate).
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