Buy JSW Steel; target of Rs 1400: Motilal Oswal

Buy

Motilal Oswal's research report on JSW Steel

JSW Steel (JSTL) has outlined a structured expansion roadmap targeting ~56MTPA crude steel capacity by FY31 (India ex-BPSL: 50MTPA). The 5MTPA integrated steel plant at Jagatsinghpur (Odisha) remains the cornerstone project, comprising BF, SMS, and HSM (900–2,150mm) with ~350MW CPP. The coastal location, with port connectivity and a slurry pipeline, ensures logistics efficiency. Phase-II scalability to 13.2MTPA is embedded upfront, lowering future capex intensity. The 5MTPA JVML facility is fully ramped up, and the BF-3 upgrade (shutdown initiated in end-Sep’25) will add ~1.5MTPA by 4QFY26, supporting incremental volumes from FY27 onward. The expansion of the Dolvi facility from 10MTPA to 15MTPA (capex ~INR210b; completion by Sep’27) is expected to strengthen the company’s positioning in Western India and in export markets. Additionally, the 1MTPA EAF at Kadapa (INR38b; commissioning by FY29) will enhance the long-product portfolio and provide decarbonization optionality.

Outlook

At CMP, JSTL trades at 7.6x FY28E EV/EBITDA, and we reiterate our BUY rating on the stock with a TP of INR1,400 (premised on 9x EV/EBITDA on Sep’27 estimate).

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JSW Steel - 1103026 - moti