Nomura sees good times for Indian steel players, picks JSW Steel and Jindal Steel as top bets

Nomura has repeated his bullish attitude towards the steel sector of India, with reference to a strong domestic demand and supporting global signals and called JSW Steel and Jindal Steel as top choices. The Brokerage increased its target price on JSW Steel to RS 1,300 from RS 1,220 and on Jindal Steel to RS 1,150 from RS 1,080, which reflects an improved visibility of the profit via FY28.

The brokerage said that the production reduction in China and the probability of new real estate-oriented stimulus measures from Beijing should support the global Hot-Rolled Coil (HRC) prices. “We repeat our bullish attitude towards the India Steel sector, notwithstanding the recent moderation of steel prices, because both domestic and global steel winds remain supportive,” said Nomura.

China’s raw steel production fell by 2% on an annual basis in the first seven months of 2025, and Nomura expects more aggressive curbs throughout the year, with production probably about 9% on an annual basis in August-December. In the meantime, the exhibition emphasized the weak state of the real estate sector of China, but expects the incremental stimulus during the plenary session of the Communist Party in October to give a boost.

Strong domestic foundations

The steel industry of India, noted Nomura, continues to show resilience. The production of raw steel increased by 9% on an annual basis and the apparent consumption increased by 8% in the first four months of FY26. The imposition of security rights has greatly shortened imports – by 65% ​​to 0.37 million tonnes in April – July 2025 of 0.99 million tons per year – which demanded the price pressure on local producers.

Despite the seasonal weakness that the Indian HRC prices leave at a discount on the import costs, Nomura expects the prices to rise around 5% above current spot levels in the second half of FY26, helped by business demand and stricter import.

Provision

On JSW Steel, Nomura said it expects a steady profit expansion that is powered by capacity additives of 7 million tons by FY28 and progress in the direction of self -reliance of raw materials. It confirmed his buy -rating and raised its target to RS 1,300, which implied an advantage of 17%. For Jindal Steel, Nomura increased its target to RS 1,150, which implied an advantage of 11%, stating upcoming capacity of 6.3 million tonnes by FY27, improved product mix and better cost efficiency. While it reduces volume and EBITDA estimates in the short term due to delays in setting up new capacity, the brokerage remains positive about growth in the medium term, which predicts an EBITDA CAGR of 26% between FY26 and FY28. “Robust consumption, import discipline and improvement of price dynamics support constructive prospects for the sector,” said Nomura.

Metal shares rose by 1% on Tuesday after Nomura had confirmed its positive prospects on the Indian steel industry.

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(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)