JPMorgan raises JSW Steel stock price target to INR1,100 on strong EBITDA

JPMorgan has raised its price target on JSW Steel Ltd. to INR1,100.00 from INR1,085.00, maintaining an Overweight rating, following the company's Q1 FY26 consolidated EBITDA growth of 37% year-over-year and 19% quarter-over-quarter, which significantly exceeded expectations. This strong performance was primarily driven by improved U.S. operations post-tariffs and reduced expenses in India. While steel prices have softened in Q2, JPMorgan anticipates the impact will be largely mitigated by lower coking coal and iron ore costs, increased volumes, and stable foreign exchange rates, with JSW Steel projecting 10.4% sales growth for FY26, outpacing India's overall steel consumption forecast.

Analysis

JPMorgan has raised its price target for JSW Steel Ltd (JSTL) to INR 1,100.00, reinforcing its Overweight rating. This revision is predicated on a significant outperformance in the first quarter of fiscal year 2026, where consolidated EBITDA grew 37% year-over-year and 19% quarter-over-quarter, exceeding both JPMorgan's and consensus expectations by 8% and 4% respectively. The earnings beat was driven by a combination of improved U.S. operations, where tariffs boosted average selling prices and EBITDA, and lower operational expenses in India following the surrender of the Jajang iron ore mine. While acknowledging that steel prices have softened in the second quarter, the outlook remains positive. JPMorgan anticipates that this price pressure will be largely neutralized by several key factors: declining coking coal costs, a 9% price reduction for iron ore from supplier NMDC, an increase in sales volumes as planned shutdowns conclude, and stable foreign exchange rates. JSW Steel's own guidance supports this optimism, projecting 10.4% year-over-year sales growth for FY26, which would outpace the expected 8.5-9.5% growth in India's overall steel consumption.

Key Decisions for Investors

• Investors may view the strong Q1 earnings beat and upwardly revised price target as a confirmation of the stock's fundamental strength, supporting a continued Overweight or buy-and-hold strategy.
• Monitor the impact of softening Q2 steel prices against the company's ability to realize cost savings from lower coking coal and iron ore, as this dynamic is critical to near-term margin stability.
• Track JSW Steel's sales volume and market share performance closely, as its ability to achieve its ambitious 10.4% sales growth guidance will be a key determinant in justifying its premium over industry growth.