JSW Steel shares clocked flat returns in six months; can they cross Rs 1,000 mark?

Shares of JSW Steel Ltd clocked flat returns in the last six months. The stock has have risen just 3% against a 9.68% rise in Sensex during the period. The marginal returns in six months have left investors of the leading steel manufacturer guessing about the outlook of the steel stock. The returns in a year (9%) from JSW Steel shares have not been attractive either. The steel stock has failed to clock double-digit returns in a period up to one year.  

However, the steel sector stock has risen 106% in three years. In the previous session, the JSW Steel stock ended flat at Rs 821.75 against the previous close of Rs 828.80 on BSE. A total of 0.27 lakh shares of the firm changed hands amounting to a turnover of Rs 2.27 crore on BSE. Market cap of the firm stood at Rs 2 lakh crore on BSE. The stock hit a 52-week high of Rs 895.60 on December 28, 2023 and a 52 week low of Rs 649.75 on March 16, 2023.     

Here’s a look at what brokerages said on the outlook of the stock .  

Axis Securities has assigned a target price of Rs 1,030.  

"By FY25, the company plans to expand its capacity to 38.5 MTPA. It will be expanding its largest single location steel plant in Vijayanagar, Karnataka from the current 12.5 MTPA capacity to 19.5 MTPA by FY25. JSW Steel plans to expand its steel production to 50 MTPA by end of this decade by entailing total capex of Rs 1 Lc Cr. The company is trading at 12 Month Forward P/B of 2.5x (long term average of 1.6x)," said the brokerage. 

On the technical aspect of the stock, the brokerage said, "The stock mirrored the formation of Nifty Metal, displaying an ascending triangular pattern since the beginning of 2022. With a recent breakout above the pattern at the Rs 850 level, it signals a continuation of the uptrend. The stock is anticipated to join the expected metal rally following the breakout. We expect a continuation of the bullish trend post-breakout, we forecast the stock price to gradually ascend towards 985-1030, reaching the projected target." 

ICICI Securities has a hold rating with a target of Rs 775.  

Global brokerage Jefferies has upgraded JSW Steel to hold from underperform earlier and raised the target price to Rs 800 for 2024 from Rs 700 earlier. 

In terms of technicals, the relative strength index (RSI) of JSW Steel stands at 43.7, signaling it's neither trading in the overbought nor in the oversold territory. The stock has a beta of 0.3, indicating very low volatility in a year. Shares of JSW Steel are trading lower than the 5 day, 10 day, 20 day, 30 day but higher than the 50 day, 100 day, 150 day and 200 day moving averages.  

The JSW Group firm reported a consolidated profit of Rs 2,773 crore in the September quarter against a consolidated net loss of Rs 848 crore in the corresponding period a year ago. JSW Steel's consolidated net revenue rose 6.7% to Rs 44,584 crore in Q2 compared to Rs 41,778 crore in the year-ago quarter.  

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at Rs 7,886 crore. The operating margin expanded by 1,350 basis points to 17.7% from 4.2% a year ago.   

JSW Steel is among India's top six steel making companies and is a part of the $22 billion JSW Group.

Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as an investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

 

 

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