Steel stocks to buy: Indian steel price at 3-month high; Jefferies sees 30% upside in these two shares

By Surbhi Jain6 days ago

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Indian steel prices are back to January 2021 high and Jefferies India believes that there is more headroom for the prices.

Indian HRC (hot rolled coil) price has corrected from a peak of Rs 57,500 per tonne in January 2021 to Rs 53,500 per tonne in March 2021. Image: Reuters

Indian steel prices are back to January 2021 high and Jefferies India believes that there is more headroom for the prices. The rally in Asian steel prices has not only eased concerns on near-term sustainability of Indian prices but the brokerage firm believes that it now provides room for more upside. Indian HRC (hot-rolled coil) price has corrected from a peak of Rs 57,500 per tonne in January 2021 to Rs 53,500 per tonne in March 2021 but has now recovered. Indian steel prices may rise further on the back of good domestic demand and the option to divert volumes to exports.

Jefferies has recommended to ‘buy’ Tata Steel and JSW Steel and sees up to a 30 per cent rally in the stock prices. It remains positive on Indian steel amid a strong price environment. “If Indian/EU spot steel prices sustain, we see further 66%/30% upside to FY22 EBITDA for Tata Steel/JSW Steel, FCFE yield of 28%/6% and net debt falling 30%/8% in the year,” it said.

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