Motilal Oswal Has A Neutral View On This Large Cap Steel Stock That Has Rallied By Upto 216.43%

The share price of JSW Steel Limited has grown massively by 216.43% in three years. Motilal Oswal believes that the stock price can go further up, but it has given a neutral view on it. The brokerage mentioned a target price of Rs 710 per share.

As per the brokerage, JSW Steel Limited is all set to capture the growing domestic steel demand amid rapid expansion in infrastructure and construction. We believethis large cap is adding capacity at a right time to capture the robust growth journey. It is a leading integrated steel manufacturer with strong iron ore linkages, ensures adequate raw material supply. With 13 active iron ore mines, the steel company has an aggregate reserve of over 1.3bt.

According to Motilal Oswal, the domestic demand will pick up. "We expect the pickup in domestic demand and higher exports (post removal of export duty) to support volumes. With the recent price increase, we should see margins improving in the near term. Around 45% iron ore requirements are met via captive mines and JSTL has planned a capex of INR34.5b over FY22-24 to enhance mining infrastructure and reduce its dependency on outsourced raw material."

As per the valuation, brokerage has given estimates that, "JSW Steel is trading at 5.8x our FY24E EV/EBITDA and 2.0x our FY24E P/B, respectively. The current valuations appear to be fully discounting the benefits, which are likely to accrue through FY24. We reiterate our Neutral rating on the stock with a target price of Rs 710 (6x FY24E EV/EBITDA)."

The latest market price of the JSW Steel Limited stock is Rs 679.85 per share, it is up by 0.49%. Its 52-week high is at Rs 789.95 per and 52-week low is at Rs 520.10 per share.

Disclaimer:

The stocks have been picked from the brokerage report of Motilal Oswal, Greynium Information Technologies and the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.