JSWSTEEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | JSWSTEEL | Market Cap | 3,09,228 Cr. | Current Price | 1,264 ₹ | High / Low | 1,307 ₹ |
| Stock P/E | 42.9 | Book Value | 341 ₹ | Dividend Yield | 0.22 % | ROCE | 10.2 % |
| ROE | 8.89 % | Face Value | 1.00 ₹ | DMA 50 | 1,213 ₹ | DMA 200 | 1,149 ₹ |
| Chg in FII Hold | 0.00 % | Chg in DII Hold | 0.10 % | PAT Qtr | 979 Cr. | PAT Prev Qtr | 1,493 Cr. |
| RSI | 59.1 | MACD | 25.4 | Volume | 15,12,691 | Avg Vol 1Wk | 21,06,340 |
| Low price | 935 ₹ | High price | 1,307 ₹ | PEG Ratio | -1.63 | Debt to equity | 0.84 |
| 52w Index | 88.6 % | Qtr Profit Var | -28.4 % | EPS | 26.5 ₹ | Industry PE | 22.9 |
Financials: JSW Steel shows moderate fundamentals with ROCE at 10.2% and ROE at 8.89%. EPS of ₹26.5 supports profitability, but quarterly PAT declined to ₹979 Cr. from ₹1,493 Cr. Debt-to-equity ratio of 0.84 indicates significant leverage.
Valuation: P/E of 42.9 is well above industry average (22.9), suggesting overvaluation. PEG ratio of -1.63 highlights poor growth-adjusted valuation. Dividend yield of 0.22% offers minimal income support.
Business Model: JSW Steel operates in the steel sector with strengths in scale, product diversification, and domestic demand. Competitive advantage lies in integrated operations, but profitability remains under pressure.
Entry Zone: Reasonable entry between ₹1,200–₹1,250 near DMA 50 (₹1,213). Long-term holding requires monitoring debt levels and earnings recovery.
Positive
- EPS of ₹26.5 reflects earnings base
- Strong 52-week index performance (+88.6%) shows price momentum
- Trading above DMA 50 and DMA 200 supports technical strength
- Domestic institutional inflows (+0.10%) add confidence
Limitation
- ROE (8.89%) and ROCE (10.2%) are modest compared to peers
- High P/E (42.9) vs industry average (22.9) indicates overvaluation
- Negative PEG ratio (-1.63) reflects poor growth-adjusted valuation
- Dividend yield of 0.22% offers limited income appeal
- Quarterly PAT declined (-28.4%)
Company Negative News
- Profit decline from ₹1,493 Cr. to ₹979 Cr.
- Valuation stretched relative to industry peers
- Earnings volatility raises investor concerns
Company Positive News
- Technical indicators (RSI 59.1, MACD 25.4) show bullish bias
- Domestic institutional inflows (+0.10%) provide support
Industry
- Steel sector benefits from infrastructure and construction demand
- Industry P/E at 22.9 highlights JSW Steel trading at a premium
Conclusion
JSW Steel presents moderate fundamentals with strong sector positioning but suffers from stretched valuations, modest return ratios, and declining profitability. Entry around ₹1,200–₹1,250 offers a cautious opportunity. Long-term investors should monitor debt management and earnings recovery before committing to sustained holding.
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