JSW Steel shares are near record highs; Morgan Stanley sees further upside

Morgan Stanley has reiterated its ‘Overweight’ call on JSW Steel with a target price of ₹1,300 per share, implying an upside potential of about 11% from Friday’s closing price of ₹1,167.80.

The brokerage said production was ahead of estimates, with JSW Vijayanagar Metallics ramping up operations smoothly and reaching 88% utilisation in September.

It also expects India sales volumes to grow around 17% year-on-year. Some inventory stocking is likely, as one blast furnace in Vijayanagar undergoes a 150-day shutdown beginning late September, Morgan Stanley noted.

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JSW Steel, on Friday, reported its highest-ever quarterly crude steel production at 7.9 million tonnes, up 17% year-on-year and 9% sequentially. Indian operations contributed 7.66 million tonnes, a rise of 16% YoY.

Earlier, in its June-quarter results, the company had posted a sharp improvement in profitability aided by lower expenses.

Net profit jumped to ₹2,184 crore from ₹845 crore a year ago, while EBITDA grew 37.5% YoY to ₹7,576 crore, expanding margins by nearly 500 basis points to 17.56%. Revenue remained broadly flat at ₹43,147 crore, up 0.5% YoY.

Morgan Stanley’s bullish stance comes as the steelmaker continues to sustain strong production growth and operational efficiency.

At 2:55 PM, shares of JSW Steel were trading at ₹1,162 on the NSE, down 0.5%.  The highest share price for the steel major is ₹1,178.80, which is also its 52-week high.