Nomura has maintained its ‘Buy’ rating on JSW Steel and Jindal Steel, raising target prices by 7 per cent and 6 per cent, respectively, reflecting improving medium-term earnings visibility in the Indian steel sector.
The brokerage expects strong growth momentum in both companies driven by robust domestic demand and supportive global trends.
For Jindal Steel, Nuvama raised its target price to Rs 1,150, rolling forward valuations to FY28 and increasing the target one-year EV/Ebitda multiple to 7 times. While FY26 and FY27 volume estimates were lowered by 23 per cent and 14 per cent to align with management guidance, Nuvama expects the company’s earnings to improve on account of improvement in product mix and cost efficiencies due to the company’s
upcoming capacity.
For JSW Steel, Nuvama expects earnings to expand steadily despite trimming FY26/FY27 Ebitda estimates by 3 per cent and 2 per cent, respectively, due to higher domestic iron ore prices. The brokerage noted that FY27/FY28 Ebitda forecasts are 6-8 per cent above Bloomberg consensus. JSW Steel currently trades at 9.4 times one-year forward EV/Ebitda.
On the global front, Nomura highlighted that China’s “anti-involution” measures to curb excess steel production have started to show results. Monthly crude steel output since April 2025 has been trending at the lower end of the five-year average, compared with the peak levels seen in March. The brokerage expects further production cuts, projecting a 9 per cent year-on-year decline in China’s steel output from August to December 2025, which should support hot-rolled coil (HRC) margins.
China’s property sector, however, continued to face structural challenges. Nomura noted that new housing starts in August 2025 fell to the lowest in a decade, while residential building prices dropped 20 per cent month-on-month. The brokerage expects incremental policy support, particularly property-focused stimulus, around the 4th Plenary Session of the Communist Party in October, which could provide further support to steel pricing.
Domestically, India’s steel demand remained strong. Nomura highlighted rising apparent consumption and production, driven by infrastructure expansion, manufacturing growth, and resilient end-user industries. The brokerage projects this momentum to continue well into FY27-28.
Rolling forward valuations to FY28, Nomura forecasts an Ebidat CAGR of 25-27 per cent across its steel coverage universe between FY25 and FY28. With these dynamics, Nomura believes India’s steelmakers are well-placed to benefit from both domestic growth and tighter global supply, making the sector a preferred pick for investors.
“India’s domestic demand growth remains intact, and with China implementing tighter production controls, we see a constructive setup for steel prices and margins,” Nomura said, underlining its positive outlook for JSW Steel and Jindal Steel.