JSW Steel: Buy or sell? Jefferies sees 15% upside, CLSA remains cautious despite Q1 profitability boost
Brokerages are divided in their views on JSW Steel after the company reported a solid performance in Q1FY26, with rising profitability supported by higher realizations and lower input costs. While Jefferies maintains a bullish stance, CLSA remains cautious, flagging limited near-term upside despite operational tailwinds. Jefferies – Buy | Target: ₹1,200 | Upside: 15%
Jefferies maintained a Buy rating on JSW Steel, projecting a 15% upside from the current market price of ₹1,044.80. The brokerage highlighted a strong Q1FY26, where EBITDA rose 37% YoY and 19% QoQ, beating their estimates by 5%. EBITDA per tonne jumped 33% sequentially to ₹11,300, driven by higher realizations .
Volumes grew 9% YoY , indicating strong demand traction.
Jefferies expects margins to contract in Q2, as Indian spot steel prices are 4% below Q1 averages, but sees this as a temporary dip.
The brokerage also noted that Asian steel spreads are 30% below long-term averages, meaning any recovery could significantly improve profitability. Over the medium term, Jefferies expects a 9% volume CAGR in India between FY25–27, even after trimming FY26–28 EPS estimates by 3–9%. CLSA – Underperform | Target: ₹890 | Downside: 15%
In contrast, CLSA retained its Underperform rating, with a target price of ₹890, implying a 15% downside. While the firm acknowledged that Q1 EBITDA was largely in line, with standalone EBITDA/t improving by ₹1,835 to ₹10,618, it remained cautious on valuation and long-term visibility. Profitability in Q1FY26 was aided by higher steel prices and lower coking coal costs .
Despite a recent dip in steel prices, CLSA expects Q2 earnings to stay stable , supported by continued low input costs and the fading out of FX/shutdown-related expenses .
However, the brokerage stressed that macro triggers and expansion project execution will be key to driving sustainable earnings. Brokerage Summary: Brokerage Rating Target Price (₹) Implied Move from CMP (₹1,044.80) Jefferies Buy 1,200 +15% CLSA Underperform 890 –15% Verdict: A split call on valuation vs growth
While Jefferies sees strong volume growth potential and a favourable cost structure as reasons to stay bullish, CLSA remains cautious due to valuation concerns and execution risks tied to macro and expansion factors. Investors may want to monitor steel price trends, coal input costs, and expansion project updates closely in the coming quarters.
Disclaimer: The brokerage views expressed are based on publicly available research reports and do not constitute investment advice. Readers should consult a certified financial advisor before making any investment decisions.
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