ICICI Securities has set a target of ₹1,225 for Jindal Steel, pointing to potential cost savings and volume growth. The company aims for sales of 10.5 to 11 million tonnes in fiscal year 2027. Investors are monitoring the planned commissioning of new capacity and a slurry pipeline, which are expected to improve profit margins if project execution remains on track.
Jindal Steel & Power Ltd is focusing on operational efficiency to drive growth, according to a recent report by ICICI Securities, which set a price target of ₹1,225 for the stock. The brokerage highlighted the company’s dual strategy of increasing sales volumes while trimming production costs as the primary factors for this outlook.
The company has maintained its sales guidance of 10.5 to 11 million tonnes for fiscal year 2027. This target relies on the successful commissioning of upcoming projects. Specifically, the management plans to start a new direct reduced iron plant and supplementary coal gasifiers by June 2027. If these projects launch on time, they are expected to contribute to production growth.
A key part of the cost-cutting plan is the 18-million-tonne slurry pipeline, which is expected to lower transportation and logistics expenses. Along with the integration of captive coal mines and the expansion of value-added steel products, the company aims to realize operational savings of approximately ₹1,000 per tonne. These improvements are intended to protect profit margins against the natural ups and downs of the steel industry.
However, investors should consider the inherent risks in such capital-intensive projects. Steel manufacturing is highly dependent on both raw material costs and global demand. Any delays in the delivery of critical equipment or unforeseen hurdles in project execution could impact the timeline for these gains. Furthermore, the steel sector is cyclical, meaning that earnings can fluctuate significantly based on product pricing and market demand.
The key monitorables for shareholders will be the actual commissioning dates of the new plant and slurry pipeline. Additionally, tracking the company’s ability to sustain margin expansion in the second half of fiscal year 2027, amid potential price volatility, will be important for assessing performance.