Shares of Tata Steel Ltd and JSW Steel Ltd are among the major constituents of the metal sector and continue to attract huge interest among investors. While shares of Tata Steel have been consolidating for over a year now, the stock of JSW Steel has gained 7.15% during the same period. Shares of Tata Steel have fallen 14.28% during a year.
In today’s trade, Tata Steel shares fell for the third straight session and lost 7% during the period. Shares of Tata Steel opened marginally higher at Rs 106.60 against the previous close of Rs 106.10 on BSE today. Tata Steel stock was trading 1.93% lower at Rs 104.05 in the afternoon session today.
The stock has fallen 7% this year. Total 15 lakh shares of Tata Steel changed hands amounting to a turnover of Rs 15.79 crore on BSE. Market cap of Tata Steel fell to Rs 1.27 lakh crore. The stock hit a 52-week high of Rs 138.63 on April 6, 2022 and a 52-week low of Rs 82.71 on June 23, 2022.
In terms of technicals, the relative strength index (RSI) of Tata Steel Ltd stands at 32.2, signaling it’s neither oversold nor overbought. Tata Steel stock has a one-year beta of 1.2, indicating high volatility during the period. Tata Steel shares are trading lower than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
On the other hand, shares of JSW Steel have lost 4% in the last three sessions. The stock has gained 7.15% in a year and fallen 12.46% in 2023. Total 0.18 lakh shares of the firm changed hands amounting to a turnover of Rs 1.23 crore on BSE. Market cap of JSW Steel rose to Rs 14,343 crore. It was trading 1.20% or Rs 8.15 lower at Rs 672.25 in the afternoon session today.
In terms of technicals, the relative strength index (RSI) of JSW Steel stands at 30.9, signaling it’s neither oversold nor overbought. JSW Steel stock has a one-year beta of 1.1, indicating high volatility during the period. JSW Steel shares are trading higher than the 200 day moving averages but lower than 5 day, 20 day, 50 day and 100 day moving averages.
Here’s a look at what analysts and brokerages said about the outlook of Tata Steel and JSW Steel shares in the next one year.
Tata Steel
Anand Rathi has maintained its buy rating on Tata Steel with a target price of Rs 133.
“The company is among the most geographically diversified steel producers in the world and is one of the top global steel companies with an annual crude steel capacity of 34 million tonnes per annum and has operations and commercial presence across the world. During the quarter, the company witnessed the full impact of correction in steel prices after the imposition of export duty in India. Tata Steel’s overall consolidated sales volumes are expected to 0.5 MT, higher compared to Q3FY23. We remain positive on Tata Steel and maintain our BUY rating with revised target price of Rs 133,” the brokerage said.
Abhijeet from Tips2trade said, “Tata Steel has a strong resistance at Rs 113 on the Daily charts. A close above this level could be bullish and lead to targets of Rs 122-128 in the near term. Support will be at Rs 107.5.”
However, Ravi Singhal, CEO of GCL is bearish on the stock.
“Tata Steel stock looks weak for a target of Rs 95 with a stop loss of Rs 121. The stock has been making lower lows and lower highs on the charts. The Q3 earnings results also come negative,” said Singhal.
Mileen Vasudeo, Senior Technical Analyst, Arihant Capital Markets said, “The stock trend remains down. The scrip has taken support at 150-day SMA (Rs 107) and is seeing a pullback rally. Hence, one can hold short position with a stop loss placed at Rs 121 for a target between Rs 104 and Rs 96 levels in the next couple of weeks.”
JSW Steel
Sneha Seth, Derivatives Research Analyst, Angel One said, “JSW Steel Ltd is one of the strongest candidates if compared to its peers. Lately, we are witnessing a rangebound move of merely 45-50 points for last couple of weeks now. Technically, the overall chart structure remains bullish, there is higher top higher bottom formation, and it is also trading close to the rising trend line support placed around Rs 690-695 odd zone. On the upside, any sustainable move beyond Rs 735-740 odd zone should trigger fresh buying interest, which can bring it towards record highs.”
Jigar S Patel – Senior Manager – Technical Research Analyst, Anand Rathi Shares and Stock Brokers said, “Since last nine months approximately, the said counter has given a whopping return of 55%. At current juncture, JSW steel has made triple top near Rs 735 approximately along with daily MACD forming negative cross along with daily RSI is below 50 levels which is a matter of concern. Additionally, it has broken 4-month-old trendline thus confirming our bearish stance in the counter. In few sessions we may sees Rs 675 levels. As of now wait and watch. Fresh longs are not advised at the current market price.”
Abhijeet from Tips2trade said, ” Rs 690-695 is a strong support for JSW Steel on the Daily charts. A close below this level could lead to Rs 670 in the near term. Strong resistance is at Rs 724.”
Sunil Damania, Chief Investment Officer at MarketsMojo said, “Steel prices, we expect, will remain fairly stable. With the government pledging a large capex in this year’s budget, steel demand would be boosted even further. And if that has to happen, a company like JSW Steel will undoubtedly benefit from it. Due to the El Nino impact, there is some uncertainty regarding how the monsoon will play out. However, if the monsoon is far weaker than anticipated, this could dampen steel demand, which could impact JSW Steel. Including both good and negative considerations in mind, a further factor has emerged, namely the Turkish earthquake. The earthquake in Turkey has impacted steel capacity, causing it to go out of production. Hence, rebuilding Turkey would necessitate an increase in steel consumption. Due to the increasing price of steel in Europe, companies such as JSW Steel can now export their goods to the European market. Hence, based on the current positive and negative variables, we believe that that JSW Steel should be retained in the portfolio, but no further purchases should be made until there is greater certainty over the monsoons.”
Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher Pvt. Ltd said, “The stock has witnessed a short correction and has attained the support zone of Rs 690, which is also the support base of the lower trendline of the channel pattern on the daily chart. We anticipate a reversal from current levels and with the RSI also well placed and the candlestick indicating a triple bottom formation on the daily chart, technically, the chances of further upward move in the coming days cannot be ruled out. We suggest to buy and accumulate the stock for an upside initial target of Rs 740 and thereafter further strength can take it to Rs 780 levels in the near future. The stop loss should be maintained near Rs 690 zone.”
Abhijeet Bora, DVP Research Analyst at Sharekhan by BNP Paribas said, “We believe that earnings downgrade cycle is largely over for steel companies and a recent recovery in steel price would drive gradual margin/earnings improvement for steelmakers. Having said that, we believe situation for steel players is wait and watch as steel margin upcycle (as seen in 2020-2021) is still not clearly visible given demand concern in US/Europe and concern of elevated coking coal price. Hence, we have a reduce rating on JSW Steel with price target of Rs 620 as valuation of 8.2x FY24E EV/EBITDA seems rich as compared to the historical average of 6.5x and we expect net debt (stood at Rs 69,498 crore as of December 2022) to remain high given the company’s capex plan.”
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