JSW Steel: Bullish Breakout with Strong Fundamentals

Technical Analysis

JSW Steel has been in a steady uptrend since 2005, consistently forming higher highs and higher lows. The stock encountered a strong resistance level at ₹767 in May 2021, which acted as a barrier multiple times in 2021, 2022, and 2023. However, in 2023, this resistance was broken, and it turned into a strong support, propelling the stock further upward.

Since July 2022, the stock has been forming a well-defined higher highs and higher lows pattern, confirming a bullish trend. Recently, in September 2024, JSW Steel made an all-time high of ₹1,063, after which it entered a correction phase. Now, the stock has regained momentum by breaking all previous lower highs and has once again reached its all-time high.

Currently, ₹1,063 is a crucial level to watch. If the stock breaks out above this level and sustains with a strong bullish candlestick, we may see further upside potential.

Target Projections:

• First Target: ₹1,100
  
• Second Target: ₹1,200
  
• Third Target: ₹1,300
  

Support Levels:

• ₹1,000 – A strong immediate support
  
• ₹880 - ₹890 – A key demand zone
  
• ₹760 - ₹770 – A major support zone
  

If these support levels hold, JSW Steel is likely to maintain its bullish momentum. However, if these supports break, the stock could see further downside pressure.

Fundamental Analysis

JSW Steel’s stock price has surged significantly, driven by multiple fundamental factors:

Government's Proposed Import Tax:

• The Indian government is considering a 12% safeguard duty on certain steel imports for 200 days to protect domestic producers from cheap imports, particularly from China.
  
• This move is expected to strengthen demand for Indian steel companies, including JSW Steel.
  

Robust Production Growth:

• JSW Steel reported a 12% YoY increase in consolidated crude steel production, reaching 24.07 lakh tons in February 2025.
  
• This indicates strong operational efficiency and an ability to meet rising steel demand.
  

Strategic Expansion in Odisha:

• JSW Steel, in partnership with POSCO (South Korea), is planning a ₹65,000 crore investment in a new steel plant in Odisha.
  
• This integrated facility, with an initial 5 million metric tons per year capacity, will enhance JSW Steel’s production capabilities amid rising infrastructure demand.
  

Diversification into Copper Sector:

• JSW Steel is setting up a 500,000 metric ton capacity copper smelter in Odisha by 2028/29, with plans to expand to 1 million metric tons by 2033/34.
  
• This move aligns with India’s push for critical minerals and green energy initiatives, ensuring long-term revenue diversification.
  

Financial Highlights (Q3 FY24 vs. Q2 FY24 vs. Q3 FY23)

• Total Income: ₹41,378 Cr | ₹39,684 Cr | ₹41,940 Cr
  
• Total Expenses: ₹35,799 Cr | ₹34,309 Cr | ₹34,776 Cr
  
• Total Operating Profits: ₹5,579 Cr | ₹5,375 Cr | ₹7,164 Cr
  
• Profit Before Tax: ₹1,178 Cr | ₹789 Cr | ₹3,303 Cr
  
• Profit After Tax: ₹719 Cr | ₹404 Cr | ₹2,450 Cr
  
• Diluted Normalized EPS: ₹2.93 | ₹1.80 | ₹9.88
  

Conclusion

With strong technical momentum and positive fundamental catalysts, JSW Steel is well-positioned for further growth. The breakout above ₹1,063 will be crucial, and sustained momentum could push the stock towards ₹1,300. Meanwhile, government support, production growth, expansion plans, and diversification efforts strengthen its long-term investment potential. Investors should monitor key support and resistance levels for entry and exit strategies.

Disclaimer:
This analysis is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with a professional before making any trading or investment decisions. The stock market involves risk, and past performance is not indicative of future results.