Jefferies Identifies 3 Metal Stocks Poised for 26% Upside

COMMODITIES

Overview

Jefferies analysts have selected Tata Steel, JSW Steel, and Jindal Stainless as top investment picks for 2026, forecasting significant upside potential. The brokerage anticipates volume growth and recovery in Asian steel spreads, supported by reinstatement of safeguard duties and higher commodity prices, leading to EPS upgrades.

Sector Outlook

Brokerage firm Jefferies has identified three key players in the Indian metals sector for 2026, expressing a positive outlook entering the new year. The firm anticipates a compounded annual growth rate (CAGR) of 6% to 9% for Indian steel volumes between FY2026 and FY2028. This growth is expected to be bolstered by the reinstatement of safeguard duties, which should support domestic steel prices.

Upside Targets

Jefferies has set aggressive price targets for its selected stocks. For Tata Steel Ltd., the target is ₹230, suggesting a 26% upside from current trading levels. JSW Steel Ltd. has a target of ₹1,400, implying an 18% potential gain, while Jindal Stainless Ltd. is projected to reach ₹1,020, offering a 20% upside. These targets are underpinned by an expectation of recovery in Asian steel spreads from 15-year lows.

Earnings Forecasts

The brokerage has revised its Earnings Per Share (EPS) estimates upwards for Tata Steel and JSW Steel for FY2027 and FY2028. These upgrades, by 9% and 17% respectively, reflect higher anticipated steel prices, with an assumed Indian Hot Rolled Coil (HRC) price of ₹54,000-₹54,500 per tonne, a notable increase from the current spot price of ₹48,500. Furthermore, EPS estimates for Hindustan Zinc and Hindalco have been raised by 4% to 7% to account for higher silver and aluminum prices respectively.

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