Steel stocks have withstood the broad selling pressure on Dalal Street over the past few months and are hovering close to their 52-week high, given that global steel prices have risen in May 2026 too. Also, of crucial importance, in China, the world’s largest steel producer, production of steel declined 4.6% y-o-y to 247.6 million tonnes during January, 2026 to March 2026, according to data from Brussels-based Worldsteel.org.
And domestic steel companies have also reported a strong performance in the March 2026 quarter performance, which has boosted investor sentiment.
It’s no surprise that steel stocks have shown a strong trend – Tata Steel was broadly flat at Rs 208.6 on Thursday, and not too far from its 52-week high of Rs 224.4 that was reached on 15 May, 2026.
Meanwhile, SAIL lost 1.4% to Rs 196.4 on Thursday, and it had reached its 52-week high of Rs 209.7 on 14 May, 2026.
Jindal Stainless was broadly flat at Rs 738.7 on Thursday, and it had reached its 52-week high of Rs 883 on 7 January, 2026.
And JSW Steel was also broadly flat at Rs 1,282.5 on Thursday, and it had reached its 52-week high of Rs 1,320 on 15 May, 2026.
Finding three steel companies with ‘reasonable valuations’
To help investors in the selection process of steel stocks for their watchlist, we looked at companies from this sector, which have revenue from operations of more than Rs 20,000 crore during FY26.
We then used the preferred valuation matrix – enterprise value (EV) to EBIDTA (operating profit) during FY26. The key purpose was to balance growth of the steel company in terms of revenue and net profit growth along with reasonable valuations.
| Company | EV / EBITDA (based on FY26 results) |
| SAIL (consolidated) | 7.4 times |
| Tata Steel (consolidated) | 9.2 times |
| Jindal Stainless | 11 times |
| JSW Steel (consolidated) | 11.7 times |
| Jindal Steel (consolidated) | 13 times |
Key growth drivers for steel companies in the March 2026 quarter
Steel companies benefited from a combination of factors to drive growth in Q4FY26 – tight check on operating costs, higher production volumes and improved steel prices. As a result, steel companies were able to deal with higher input costs like coking coal, which have risen nearly 11% y-o-y to $ 225 per tonne in the fourth quarter of FY26. Also, freight and logistics costs have shown a rise in the March 2026 quarter.
Let’s dig in to analyse the performance of three ‘reasonably’ valued steel stocks.
SAIL – Tight check on operating costs helps net profit rise 46.8%
The company has highlighted its saleable steel production was 4.9 million tonnes in Q4FY26 as against 4.7 million tonnes a year earlier. Realisations were broadly flat y-o-y at an estimated Rs 62,884 per tonne in the March 2026 quarter. However, higher volume of steel sold helped consolidated revenue from operations rise 5.1% y-o-y to Rs 30,813.5 crore in the quarter under review.
Its operating profit margin grew 240 basis points y-o-y to 14.3% in the March 2026 quarter, and that was thanks to employee expenses as a percentage of revenue from operations declining 250 basis points y-o-y to 8.7% in the quarter under review.
A tight check on costs helped the company’s consolidated net profit rise 46.8% y-o-y to Rs 1,835.5 crore in the March 2026 quarter.
Tata Steel – Steel volumes and higher-margin products in Indian operations drives growth
Tata Steel has highlighted that the recent expansion in capacity at Kalinganagar, Odisha resulted in deliveries from its key Indian operations at 6.19 million tonnes in the March 2026 quarter as against 5.6 million tonnes a year earlier.
On including its production operations in Asia and Europe, steel deliveries were 8.72 million tonnes in Q4FY26 as against 8.33 million tonnes a year earlier.
Its steel realisations, including from India and overseas operations, grew an estimated 7.5% y-o-y to Rs 72,560 per tonne in Q4FY26. The company has pointed out to continued focus on high-value products like tubes, tinplate, and wires, and it helped to grow realisations in the quarter under review.
Its consolidated operating profit margin rose 380 basis points y-o-y to 15.5% in the fourth quarter of FY26. Strong performance at its Indian operations helped it to offset difficult operating environment at its European operations, given the Russia-Ukraine war.
Also, at its UK operations, the company is working a £1.25 billion (nearly Rs 16,000 crore) electric arc furnace (EAF) at Port Talbot, and it would have a capacity of 3 million tonnes, when commissioned in end 2027.
The above steel plant would cut emissions by nearly 90%, as per various estimates. The transition at Tata Steel UK is being part funded via £ 500 million (nearly Rs 7,000 crore) from the UK government.
Strong performance at its Indian operations helped the company’s consolidated net profit rise 147% y-o-y to Rs 2,965 crore in the March 2026.
Jindal Stainless – Higher realisations drive growth
The company has highlighted its sales volumes at 641,743 tonnes in the March 2026 quarter were broadly flat on a y-o-y basis. Realisations grew 11.4% y-o-y to Rs 1.76 lakh per tonne in Q4FY26, and realisations in this segment are significantly higher than regular steel products, given lesser competition. Also, stainless steel is a much higher grade steel product as compared to hot rolled coil (HRC) used in construction sector.
As a result, consolidated revenues grew 11.2% y-o-y to Rs 11,337 crore in Q4FY26.
Higher realisations helped consolidated operating profit margin rise 250 basis points y-o-y to 12.9% in the March 2026 quarter, and consolidated net profit grew 41.4% y-o-y to Rs 834.4 crore in the quarter under review.
Return on Equity (RoE) – which steel company uses capital most efficiently
SAIL has a consolidated RoE of 6.4% according to Screener.in, while it is 11.9% for Tata Steel and 17.8% for Jindal Stainless.
Comparison of RoE on consolidated basis
| Company | Return on Equity (RoE) in % |
| SAIL | 6.4% |
| Tata Steel | 11.9% |
| Jindal Stainless | 17.8% |
Growth outlook and investors on Dalal Street
Steel prices are expected to remain strong on a global basis in the short-term, given the production cuts made by China. Investors will also need to keep a close eye on the rising input cost structure for the steel industry, and price hikes made by companies, going forward.
Of equal importance, the local impact of the Middle East crisis needs to be carefully monitored, and if growth slows in the Indian economy in the short-term, the potential impact it will have on steel demand and steel prices.
Readers can add SAIL, Tata Steel and Jindal Stainless to their watch list of stocks for 2026, and monitor closely if performance matches expectations.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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