Shares of steel companies surged to fresh highs on Tuesday, with Tata Steel, JSW Steel and SAIL rising, supported by strong brokerage optimism on the sector’s medium- to long-term outlook. The rally was driven by a combination of company-specific triggers and improving global dynamics, alongside a broader shift in sentiment towards Indian metals.
Tata Steel touched a record high of ₹218.24, while JSW Steel rose 2% to its peak of ₹1305.90. Moreover, SAIL gained 2.7% to its 52-week high of ₹189.05.
The gains reflect increasing confidence that India could emerge as a key driver of global steel demand, especially as China’s dominance weakens.
Why are brokerages bullish on the steel sector?
Brokerages believe favourable macro trends, rising infrastructure spending, and improving profitability could support sustained earnings growth across the sector, positioning Indian steel companies for a structural upcycle rather than a short-term cyclical rebound.
Recently as per media reports, global brokerage house Goldman Sachs turned constructive on the sector, highlighting a structural shift in global steel demand with India at the centre. The brokerage noted that India is increasingly becoming the primary driver of incremental global consumption, drawing parallels with China’s growth phase between 2005 and 2020.
“India is driving incremental global steel consumption in the current decade, reminiscent of China from CY05-20,” Goldman Sachs said, underscoring a long-term structural opportunity.
Goldman Sachs expects India’s steel consumption to nearly double to 212 million tonnes by FY32, implying a 6.8% CAGR, supported by infrastructure expansion, urbanisation and manufacturing growth, media reports stated. It also highlighted that India remains the only major economy where steel consumption has not yet peaked, reinforcing long-term demand visibility.
The brokerage initiated coverage on the ferrous sector with a positive stance, naming JSW Steel (Buy, target ₹1,490) and Shyam Metalics (Buy, target ₹1,065) as top picks, citing strong growth visibility and diversification benefits. It assigned Neutral ratings to Tata Steel ( ₹210) and Jindal Steel ( ₹1,335), while maintaining a Sell on NMDC ( ₹84), flagging concerns over volume growth and rising competition.
Goldman Sachs also expects profitability to improve meaningfully, with EBITDA margins rising through FY28 driven by operating leverage and capacity ramp-up. It projects PAT margins to expand from 2.7% in FY25 to 9.2% by FY28, led by Tata Steel and Jindal Steel. The brokerage further highlighted that raw material spreads remain above long-term averages, creating a favourable earnings backdrop.
Moreover, Jefferies also struck a bullish tone, pointing to improving global steel dynamics driven by declining Chinese exports and production, which are helping rebalance the market and support pricing power.
“Improving steel market balance in China, driven by supply rationalization, should be positive for Asian steel spreads,” Jefferies said, highlighting a key tailwind for Indian players.
The brokerage noted that China’s steel exports declined 9% YoY in the January-March quarter of 2026 after hitting record highs earlier, while production also fell, easing supply pressures. This has led to a recovery in Asian steel spreads from near 15-year lows, with further upside potential if the trend continues.
Jefferies expects Indian steel prices to remain in the range of ₹55,500–56,000 in FY27–28, which is 3–4% below current levels, and forecasts strong EBITDA growth of 30–45% YoY for JSW Steel and Tata Steel in FY27. It also estimates FY27–28 earnings for the companies to be 5–28% above Street expectations.
Jefferies maintained Buy ratings on JSW Steel, Tata Steel, Jindal Stainless and Shyam Metalics, noting that the sector has already outperformed, with stocks rising 8–17% in 2026 so far, beating the Nifty by 17–26%. It added that current valuations remain justified given improving return ratios and earnings upside potential, while flagging Middle East geopolitical risks as a near-term monitorable.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
