JSWSTEEL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Financials & Profitability

Revenue & Profit Growth: JSW Steel reported quarterly PAT of ₹2,178 Cr, down from ₹2,557 Cr — a 14.8% decline. However, YoY profit variation is strong at 80.8%, showing recovery from a low base.

Return Metrics

ROE: 8.89% and ROCE: 10.2% — moderate, but typical for cyclical steel businesses.

EPS: ₹27.8 — solid earnings per share for a ₹1,121 stock.

Debt Profile: Debt-to-equity at 0.86 — manageable for a capital-intensive sector.

Dividend Yield: 0.25% — low, but consistent with reinvestment strategy.

💸 Valuation Indicators

Metric Value Insight

P/E Ratio 35.8 Above industry PE of 23.1 — slightly expensive.

P/B Ratio ~3.44 Reasonable relative to book value ₹326.

PEG Ratio -1.36 Negative PEG suggests earnings contraction or unreliable growth forecast.

🔍 Conclusion: Valuation is mildly stretched, but not excessive considering cyclical recovery and capacity expansion.

🏭 Business Model & Competitive Edge

Core Operations: JSW Steel is India’s largest steel producer with a diversified product mix and strong domestic footprint.

Expansion Strategy

Brownfield expansion at Dolvi and Vijayanagar to push capacity to 36.4 MTPA by FY26

1

.

Focus on value-added steel products (VASP) and flat steel segments.

Competitive Advantage: Superior execution, scale, and backward integration in iron ore and energy.

Growth Outlook: Morgan Stanley projects an 18% upside with improving spreads, domestic demand, and favorable global macro trends

2

.

📉 Technicals & Entry Zone

RSI: 69.5 — nearing overbought zone.

MACD: 17.4 — bullish momentum.

DMA Levels: Price above both 50-DMA and 200-DMA — strong trend.

📌 Suggested Entry Zone: ₹1,050–₹1,080 — closer to 50-DMA, offering better risk-reward.

🕰️ Long-Term Holding Guidance

Hold if Invested: Strong fundamentals, expansion plans, and macro tailwinds support long-term value.

Buy on Dips: Prefer entry below ₹1,080, especially if RSI cools off.

Monitor: Steel price cycles, capacity execution, and margin trends.

If you'd like a forecast model for FY30 or a peer comparison with Tata Steel and SAIL, I can build that next.

1

www.moneycontrol.com

2

Business Standard

Edit in a page