Tata Steel, Jindal Steel, JSW Steel, SAIL, NMDC: Target prices for 5 stocks
Kotak Institutional Equities sees 15-20 per cent downside for Tata Steel and SAIL. It upgraded NMDC Ltd to 'Reduce' from 'Sell'.
- Apr 24, 2026,
- Updated Apr 24, 2026 9:56 AM IST
Kotak Institutional Equities in a fresh note on metals & mining sector upgraded NMDC Ltd to 'Reduce' from 'Sell'. It continued to see better risk-reward in non-integrated steel producers such as Jindal Steel Ltd and JSW Steel Ltd, as the brokerage maintained its 'Sell' rating on Steel Authority of India Ltd (SAIL) and Tata Steel Ltd, given weaker growth visibility and rich valuations. Kotak said domestic steel prices have climbed 20 per cent in the past four months, driven by a combination of extension of safeguard duties; higher regional prices due to elevated freight and energy costs; rupee weakness; and supply disruptions in few pockets due to gas shortages amid robust domestic demand.
"Higher prices are only partially offset by rising ore/coal costs and margins should rise further in 1QFY27E. We believe the margin expansion is largely sustainable and raise FY2027-28E earnings to reflect higher spreads," it said.
In the case of steel, Kotak said spot domestic HRC prices are up Rs 10,000 per ton or 20 per cent against December 2026 exit levels, underscoring the pace of price hikes in 4QFY26.
This was aided to a large extent by extension of safeguard duties for flat products, notified on the last day of 2025. Robust domestic demand, cost-led increase in Chinese prices and supply disruptions in secondary steel industry due to gas shortages have all aided in recovery in spot HRC/rebar prices versus 3QFY26 levels, it said adding that domestic prices are at 1 per cent discount to China import parity prices.
Demand growth in single digits "Domestic demand at 163.7 million tons increased 7.7 per cent YoY in FY2026, following four successive years of double-digit growth. Exports increased 36 per cent YoY to 6.6 million tons, albeit on a weak base, while imports declined 32 per cent YoY to 6.5 million tons, leading to marginal net exports for FY2026," Kotak said.
This, it said, was however an improvement over two consecutive years of net imports in FY24 and FY25. Kotak expects industry utilisation to remain 90 per cent over the medium term led by robust demand growth of 7 per cent CAGR over FY2026-29, outperforming capacity additions.
Raw material prices rise Kotak said spot hard coking coal prices and seaborne iron ore prices are 16 per cent and 2 per cent higher against Q3 averages, aiding input cost inflation for the global steel industry. This is led by higher energy prices and increase in freight costs due to the ongoing conflict in the West Asia, Kotak said.
"We increase seaborne iron ore price forecast by 4-5 per cent at $100/95/ton for FY2027/28, factoring in freight cost escalation. Weaker growth in high grade iron ore production in India should reduce domestic price discount to import parity and benefit producers such as NMDC," it said.
Target pricesfor five stocks Kotak sees 15-20 per cent downside for Tata Steel and SAIL. It suggested fair values of Rs 180 for Tata Steel and Rs 140 for SAIL. Its fair value for NMDC at Rs 90 suggests 2 per cent potential downside. For JSW Steel, Kotak suggested a fair value of Rs 1,425, hinting at 11 per cent potential upside. Kotak valued Jindal Steel at Rs 1,400, suggesting 9 per cent potential upside.
Kotak Institutional Equities in a fresh note on metals & mining sector upgraded NMDC Ltd to 'Reduce' from 'Sell'. It continued to see better risk-reward in non-integrated steel producers such as Jindal Steel Ltd and JSW Steel Ltd, as the brokerage maintained its 'Sell' rating on Steel Authority of India Ltd (SAIL) and Tata Steel Ltd, given weaker growth visibility and rich valuations. Kotak said domestic steel prices have climbed 20 per cent in the past four months, driven by a combination of extension of safeguard duties; higher regional prices due to elevated freight and energy costs; rupee weakness; and supply disruptions in few pockets due to gas shortages amid robust domestic demand.
"Higher prices are only partially offset by rising ore/coal costs and margins should rise further in 1QFY27E. We believe the margin expansion is largely sustainable and raise FY2027-28E earnings to reflect higher spreads," it said.
In the case of steel, Kotak said spot domestic HRC prices are up Rs 10,000 per ton or 20 per cent against December 2026 exit levels, underscoring the pace of price hikes in 4QFY26.
This was aided to a large extent by extension of safeguard duties for flat products, notified on the last day of 2025. Robust domestic demand, cost-led increase in Chinese prices and supply disruptions in secondary steel industry due to gas shortages have all aided in recovery in spot HRC/rebar prices versus 3QFY26 levels, it said adding that domestic prices are at 1 per cent discount to China import parity prices.
Demand growth in single digits "Domestic demand at 163.7 million tons increased 7.7 per cent YoY in FY2026, following four successive years of double-digit growth. Exports increased 36 per cent YoY to 6.6 million tons, albeit on a weak base, while imports declined 32 per cent YoY to 6.5 million tons, leading to marginal net exports for FY2026," Kotak said.
This, it said, was however an improvement over two consecutive years of net imports in FY24 and FY25. Kotak expects industry utilisation to remain 90 per cent over the medium term led by robust demand growth of 7 per cent CAGR over FY2026-29, outperforming capacity additions.
Raw material prices rise Kotak said spot hard coking coal prices and seaborne iron ore prices are 16 per cent and 2 per cent higher against Q3 averages, aiding input cost inflation for the global steel industry. This is led by higher energy prices and increase in freight costs due to the ongoing conflict in the West Asia, Kotak said.
"We increase seaborne iron ore price forecast by 4-5 per cent at $100/95/ton for FY2027/28, factoring in freight cost escalation. Weaker growth in high grade iron ore production in India should reduce domestic price discount to import parity and benefit producers such as NMDC," it said.
Target pricesfor five stocks Kotak sees 15-20 per cent downside for Tata Steel and SAIL. It suggested fair values of Rs 180 for Tata Steel and Rs 140 for SAIL. Its fair value for NMDC at Rs 90 suggests 2 per cent potential downside. For JSW Steel, Kotak suggested a fair value of Rs 1,425, hinting at 11 per cent potential upside. Kotak valued Jindal Steel at Rs 1,400, suggesting 9 per cent potential upside.