JSW Steel stock extends rally to 6th day, hits fresh all-time high. What’s fuelling this surge?

Indian stock market: Metal stocks have become hot picks for investors amid the March rebound rally on Dalal Street, driven by multiple positive domestic and global factors, and outpaced the impact of the 25% tariffs on steel and aluminium announced by the Donald Trump administration.

Further, the positive outlook on Indian steel companies by analysts has further aided the recovery rally in domestic metal stocks. Amid this backdrop, shares of JSW Steel, the flagship business of the diversified $24 billion JSW Group, extended their winning streak for the sixth consecutive trading session on Monday, March 24, hitting a fresh all-time high of ₹1,072 per share, rising 1.2% from the previous closing price.

So far this month, the company’s shares have surged 11.55%, marking their biggest monthly gain since June 2023. Last week, the Directorate General of Trade Remedies (DGTR) proposed a 12% safeguard duty on select steel imports for 200 days to protect domestic producers.

Indian steel prices have risen 5% from their December lows, and analysts expect that the safeguard duty will provide further support, boosting margins and valuations. Vietnam and South Korea, the top two export destinations for Chinese steel, had earlier imposed anti-dumping tariffs on Chinese imports.

Furthermore, the sustained drop in the US dollar index, China’s stimulus measures to counter Trump tariffs, and production cuts announced by Beijing have also supported the rally in steel stocks.

Jefferies, Fitch expect strong steel demand

Global brokerage firm Jefferies currently factors in Indian steel prices at ₹51,000 and ₹52,500 in its FY26E and FY27E estimates (3-6% above the spot price of ₹49,500). In terms of sensitivity, it projects that a ₹1,000 increase in steel prices (2% of the spot price) could lift FY26E EBITDA for JSW Steel by 9% and FY26E EPS by 23%, assuming all other factors remain unchanged.

Meanwhile, credit rating agency Fitch Ratings expects that the 25% tariffs imposed by the US on steel imports will have a limited direct impact on Indian steelmakers, given their minimal exposure to the US market.

However, the agency warned that redirected steel exports into India from countries heavily reliant on US markets, along with risks to growth in key end-use industries, could put pressure on domestic steel prices depending on the severity and duration of the tariff war.

Nonetheless, Fitch expects India’s steel demand to grow by around 10% in FY26, driven by strong public spending and demand from the construction, infrastructure, and manufacturing sectors.

Steel production improves 12% YoY in February

JSW Steel's consolidated crude steel production for February 2025 stood at 24.07 lakh tonnes, 12% higher year-on-year (YoY) compared to the same period last year. Domestic steel production stood at 23.32 lakh tonnes, marking a 13% YoY increase.

Over the last three decades, the company has grown from a single manufacturing unit into India's leading integrated steel company, with a consolidated crude steel capacity of 35.7 MTPA, including 1.5 MTPA in the US. Domestic crude steel capacity stood at 32.5 MTPA, and the company expects it to reach 34.2 MTPA upon the full commissioning of the expansion project by its wholly owned subsidiary, JSW Vijayanagar Metallics Ltd. (JVML), at Vijayanagar.

In its next phase of growth, the company aims to increase consolidated capacity to 43.5 MTPA over the next three years. The company's Vijayanagar plant in Karnataka is India's largest single-location steel-producing facility, with a capacity of 17.5 MTPA (including under commissioning), according to the company's exchange filing dated March 9.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.