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Jefferies upgrades JSW Steel to 'Buy'; retains 'Buy' on Tata Steel.
A 12% safeguard duty increases domestic steel prices and margins.
The steel industry is expecting 8–10% volume CAGR over FY25–27.
Global brokerage Jefferies has been bullish on India's steel industry, spurred by the government's imposition of a 12% safeguard duty on flat steel imports in April 2025. This is intended to shield domestic producers from an increase in cheaper imports, mainly from China, Japan, and South Korea.
After the imposition of the duty, domestic steel prices have grown 14% year-to-date to ₹53,500 per metric ton. This is now around 5% more than the price of imported steel even after adjusting for the safeguard duty.
Jefferies has thus upgraded JSW Steel to 'Buy' from 'Hold' with a new target price of ₹1,200 and left Tata Steel's rating at 'Buy' on the grounds of stable valuations and better earnings outlook. The company has increased FY25–27 earnings per share (EPS) estimates for Tata Steel and JSW Steel by 22–29% and 23–24%, respectively.
The brokerage also pointed out that present-day Asian steel conversion spreads are roughly 30% lower than their long-term average, indicating a positive risk-reward opportunity for investors. Jefferies is expecting Indian steel players to post a volume CAGR of 8–10% during FY25–27, driven by robust domestic demand and the safeguard duty shield.
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