JSWSTEEL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.4

Here’s a well-rounded breakdown of JSW Steel (JSWSTEEL) to help you evaluate its long-term merit and entry opportunities 🔍

🧾 Core Financials

Profitability

ROCE: 8.11% and ROE: 4.92% — below ideal thresholds; capital efficiency is modest.

EPS: ₹19.8 is decent, but weak ROE suggests diluted shareholder returns.

Earnings Performance

Quarterly PAT surged from ₹1,525 Cr. to ₹2,184 Cr. — a 158% jump, likely driven by improved operating margins or cyclical pricing boosts.

Leverage

Debt-to-equity: 1.24 — steel manufacturing is capital-intensive, so this is typical, though higher debt increases vulnerability to interest rate hikes.

Dividend

0.27% yield — minimal passive income, suggesting retained earnings are prioritized for growth or deleveraging.

📊 Valuation Metrics

Metric Value Implication

P/E Ratio 50.0 Hefty premium vs. industry PE of 22.4

P/B Ratio ~3.18 Reasonable, but slightly stretched

PEG Ratio -1.15 Distorted—possibly due to earnings volatility

⚠️ PEG ratio in negative territory suggests erratic profit growth or data anomalies. Better to compare with rolling averages.

⚙️ Business Model & Strategic Edge

JSW Steel is one of India’s largest steel manufacturers, with an expansive product portfolio and global footprint.

Benefits from vertical integration, strong distribution channels, and large-scale capacity — giving it scale economies.

Recent capex focus on modernization and green steel tech may enhance ESG appeal.

Institutional activity is mixed: FII reduced holdings (-0.36%), while DII increased (+0.41%) — possibly reflecting shifting sentiments.

📉 Technical Setup & Entry Zone

Current Price: ₹1,035, sandwiched between DMA-50 ₹1,022 and DMA-200 ₹985 — signals consolidation.

RSI: 54.0 — neutral, with room for upside or pullback.

MACD: 3.38 — mildly positive momentum.

📌 Recommended Entry Zone

A good zone to consider: ₹985–₹1,010, ideally near DMA-200 during weak sessions.

Volume uptick and MACD crossover confirmation could be the green light for accumulation.

⏳ Long-Term Outlook

While fundamentals are solid, valuation is rich and profitability could fluctuate with commodity cycles.

Monitor steel price trends, export opportunities, and capacity expansion outcomes.

Best viewed as a cyclical holding — accumulate during corrections, trim during peaks.

Would you like a peer comparison with Tata Steel or SAIL? I can help size up where JSW stands in the broader steel saga 🔩📈.

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