JSWSTEEL - Investment Analysis

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

📊 Investment Analysis: JSW Steel Ltd. (JSWSTEEL)

Rating: 3.6

While JSW Steel has a commanding market cap and scale, several financial metrics suggest that long-term investors should proceed with caution. Mixed fundamentals and elevated valuation leave limited room for margin expansion unless growth accelerates meaningfully.

✅ Positives

Recent Profit Surge: PAT jumped 158% QoQ (₹1,525 Cr → ₹2,184 Cr), signaling operational revival.

High Trading Volume: Well above 1-week average, confirming strong participation.

Momentum Indicators: RSI of 54 and MACD of 3.38 show steady uptrend.

EPS of ₹19.8: Solid earnings base supports long-term potential if sustained.

❌ Risks

ROE (4.92%) & ROCE (8.11%): Underwhelming capital efficiency for a large-cap.

P/E of 50 vs Industry 22.4: Extremely pricey—growth may be priced in.

PEG Ratio -1.15: Negative PEG usually implies either poor growth outlook or inflated earnings.

Dividend Yield: 0.27%: Minimal income play.

Debt-to-equity: 1.24: Above comfort zone—leverage is a concern.

FII Selling: 0.36% decline reflects cautious foreign sentiment.

🎯 Ideal Entry Price Zone

₹880–₹920 Accumulate near DMA-200 and close to ₹854 support. Above ₹1,000, the risk-to-reward becomes skewed unless earnings momentum continues.

📈 Strategy for Existing Holders

🕒 Suggested Holding Period

1–3 years, contingent on improvement in ROCE (>12%) and debt reduction.

Monitor quarterly performance for sustainability of current profit spike.

✂️ Exit Strategy

Partial exit near ₹1,070–₹1,100, especially if RSI exceeds 65 with high volume.

Full exit if

ROCE stagnates below 8%

PEG remains negative

FII selling accelerates

EPS drops below ₹15 for two consecutive quarters

Would you like a peer comparison with Tata Steel or SAIL to spot relative value in the metals space? Or maybe shift the lens to metal-related ETFs for passive diversification? Let’s dig deeper if you’re game. 🪙📈

Edit in a page