The Nifty Metal Index climbed more than 2% intra-day, adding to its steady gains over the past six months. Jefferies says the sector is turning favourable, even with recent price swings, because Asian steel spreads are now near 15-year lows and are too weak to remain there for long. The firm also expects India’s 12% safeguard duty on steel to return, which would help lift domestic prices
Alongside this, Jefferies continues to project strong operating profit growth for Tata Steel and JSW Steel over the next three years and sees Tata as the stronger pick between the two. Jefferies still expects the two to deliver strong growth ahead, with operating profit projected to rise about 22–23% a year through FY28.
Here is a detailed analysis of Jefferies top picks in the steel and mining sector and the investment rationale –
Jefferies on Tata Steel: ‘Buy’
Jefferies has a Buy call on Tata Steel with a target price of Rs 200, which points to a 22% upside. In a stronger scenario, the firm sees the stock rising by as much as 38%.
The analysts prefer Tata Steel over JSW Steel because its India operations are becoming a larger share of total output. India business is expected to grow at about 8% a year, and profits can improve quickly if steel prices recover and if the safeguard duty returns. Jefferies is giving no value to the European arm for now, keeping the focus on the far more profitable India segment.
Jefferies on JSW Steel: ‘Buy’
Jefferies has maintained a Buy rating on JSW Steel with a target price of Rs 1,300, implying a 16% potential gain, and up to 30% in a more optimistic scenario.
The company is expanding capacity at existing plants, which should lift output around 7% a year through FY28. Jefferies expects domestic prices to firm up if the safeguard duty returns and as Asian spreads improve. The stock could see greater upside if JSW earns more per tonne than currently projected.
Jefferies on Shyam Metalics: ‘Buy’
Jefferies values Shyam Metalics at Rs 1,050, which suggests a 31% upside.
Jefferies says the broader sector setup supports the rating. A rebound in steel spreads and the likely return of the safeguard duty would directly help companies like Shyam that are more exposed to domestic pricing.
Jefferies on Coal India: ‘Buy’
Jefferies has reiterated its Buy call on Coal India with a price target of Rs 430, indicating an upside of 21%.
The brokerage notes that Coal India continues to generate steady cash flows, supported by demand from power plants and industrial users. The stock remains attractive as a defensive play at a time when metal prices are unstable.
Jefferies on Jindal Stainless: ‘Buy’
Jefferies has set a target price of Rs 925 for Jindal Stainless, pointing to a 21% upside.
The firm expects stainless steel demand to remain firm across construction, transportation, and manufacturing. A recovery in global spreads and stronger Indian prices would help improve earnings from current levels.