Why Is Nomura Bullish on the Steel Sector With JSW Steel and JSPL in Focus?
India’s steel sector is a critical component of the country’s industrial growth and infrastructure development. Companies like JSW Steel and Jindal Steel & Power Limited (JSPL) have emerged as leaders, expanding capacity and positioning themselves to benefit from domestic demand and global market shifts. Recent trends in production, pricing, and stimulus expectations have renewed optimism. Nomura’s latest research outlines why the sector is poised for an earnings upcycle in the coming years.
Nomura on Steel Sector Trends
Nomura notes that positive indicators such as production cuts, China’s stimulus hopes, and rising domestic steel prices are driving sector optimism. For FY25–28, the brokerage projects an EBITDA CAGR of 25–27%, reflecting a strong earnings trajectory for Indian steelmakers.
JSW Steel: Steady Earnings Growth
JSW Steel is one of India’s largest steel producers with a diversified product mix and strong domestic market presence. Nomura expects steady earnings growth driven by operating efficiency, favorable domestic demand, and a robust expansion pipeline. The company’s disciplined cost structure positions it well to capture margin improvements as steel prices firm up.
JSPL: Capacity Expansion as a Growth Driver
Jindal Steel & Power Limited (JSPL) continues to focus on capacity expansion as a major driver of earnings. With projects underway to increase production, Nomura believes JSPL is set to see strong earnings acceleration over the next few years. The expansion strategy aligns with India’s infrastructure and construction demand outlook, providing a structural growth tailwind.
China Stimulus and Global Context
The global steel market is influenced heavily by developments in China, the world’s largest steel consumer. Stimulus measures aimed at boosting real estate and infrastructure in China are expected to provide demand support and stabilize prices. This global tailwind, combined with India’s domestic consumption, creates a favorable dual-driver environment for Indian steel players.
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Domestic Demand and Pricing Outlook
India’s infrastructure push, housing sector revival, and automotive demand are expected to keep domestic steel consumption on an upward trajectory. Rising domestic steel prices also add to earnings visibility. Nomura sees this trend sustaining over the medium term, making Indian steel stocks attractive even after recent corrections.
Investor Takeaway
Nomura’s steel sector outlook highlights a favorable earnings cycle backed by China stimulus hopes, domestic demand growth, and capacity expansion. JSW Steel is expected to deliver steady earnings growth, while JSPL offers strong upside through expansion-led capacity increases. Investors should view the sector as a long-term play on India’s infrastructure and consumption growth story.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
tags: Nomura, Steel Sector, JSW Steel, JSPL, Indian Metals, Capacity Expansion, China Stimulus, Domestic Steel Prices, Infrastructure Demand
