India Steel Earnings Outlook Stays Firm as Nomura Keeps Buy on Tata Steel and JSW Steel Despite Rebar Slump

The India steel earnings outlook remains firm even as rebar prices correct, with brokerage Nomura maintaining its Buy rating on Tata Steel and JSW Steel in its latest sector note. The brokerage said flat steel prices, led by hot rolled coil, are holding up well, helping cushion overall profitability even as long steel products such as rebar see a pullback in realisations.

Nomura's view on the India steel earnings outlook is built on the idea that domestic price momentum, rather than global factors such as China, should largely determine the earnings potential of major Indian steel players over the coming quarters.

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What Is Driving the India Steel Earnings Outlook Despite the Rebar Slump

Domestic hot rolled coil prices have firmed up meaningfully through the year, supported by the government's three year extension of safeguard duties aimed at curbing low priced imports. Nomura noted that the domestic flat to long spread has narrowed and turned positive, with HRC prices continuing to outperform the recent correction in rebar prices, a key reason the India steel earnings outlook has held steady even as construction linked long products soften.

India's HRC spot margin has remained well above the median level seen over the past two years, even after a modest sequential decline, according to Nomura. The brokerage believes large, blast furnace based players are better positioned than smaller, gas based producers, since the bigger players can more easily substitute alternate fuel sources and absorb input cost volatility.

The table below summarises Nomura's key calls underpinning its India steel earnings outlook.

Company	Nomura Rating	Target Price
Tata Steel	Buy	Rs 220
JSW Steel	Buy	Rs 1,340
Jindal Steel	Buy	Rs 1,280
Lloyds Metals and Energy	Buy	Rs 1,600

Why Nomura Is Bullish on Tata Steel and JSW Steel

Tata Steel was trading around Rs 188 on Tuesday, with Nomura's target of Rs 220 implying meaningful upside if the India steel earnings outlook continues to hold up as domestic volumes expand. The brokerage expects steady year on year volume growth in the company's India operations, even as its European business continues to face a tougher demand environment. Use the Univest Screener to compare Tata Steel's valuation against domestic and global steel peers.

JSW Steel was trading around Rs 1,236, leaving room toward Nomura's target of Rs 1,340. The brokerage expects consolidated volume growth to be driven in part by the company's joint ventures, even as it continues working through a blast furnace shutdown at its Vijayanagar plant. Despite this near term operational headwind, Nomura's constructive India steel earnings outlook keeps JSW Steel among its preferred large cap picks in the sector.

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What Should Investors Watch in the India Steel Earnings Outlook

Investors tracking the India steel earnings outlook should watch monthly crude steel production and finished steel consumption data, both of which have continued to expand steadily through the year, supported by sustained government infrastructure spending and steady demand from construction, railways and manufacturing. Coking coal prices and the trajectory of safeguard duty enforcement are also likely to remain key swing factors for sector margins.

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Conclusion

The India steel earnings outlook remains constructive despite a correction in rebar prices, with Nomura's continued Buy ratings on Tata Steel and JSW Steel reflecting confidence that domestic price strength and steady volume growth can offset global headwinds. With targets implying double digit upside on both names, the sector remains one to watch as the next round of quarterly earnings approaches. These targets are analyst estimates and not guaranteed returns, so investors should consult a SEBI registered advisor before making any investment decision.

Frequently Asked Questions

What is Nomura's view on the India steel earnings outlook?

Ans. Nomura believes the India steel earnings outlook remains firm, underpinned by strong domestic hot rolled coil prices, steady volume growth and government infrastructure spending, even as rebar prices have corrected recently.

What is Nomura's target price for Tata Steel?

Ans. Nomura has a Buy rating on Tata Steel with a target price of around Rs 220, citing resilient India operations even as the company's European business faces a tougher environment.

What is Nomura's target price for JSW Steel?

Ans. Nomura has a Buy rating on JSW Steel with a target price of around Rs 1,340, supported by expected consolidated volume growth despite a blast furnace shutdown at its Vijayanagar plant.

Why has the rebar price slump not hurt the India steel earnings outlook?

Ans. Hot rolled coil prices have held up well even as rebar prices correct, helped by safeguard duties on imports. Since large players have a diversified product mix, the overall India steel earnings outlook has stayed resilient.

Which other steel stocks does Nomura rate Buy?

Ans. Apart from Tata Steel and JSW Steel, Nomura also has Buy ratings on Jindal Steel, with a target of Rs 1,280, and Lloyds Metals and Energy, with a target of Rs 1,600.

How is India's steel demand trending this year?

Ans. India's finished steel consumption and crude steel production have both continued to expand steadily through the year, supported by government infrastructure spending and steady demand from construction, railways and manufacturing.

Should investors buy steel stocks based on this outlook?

Ans. Nomura's targets reflect the brokerage's own estimates and are not guaranteed returns. This article does not constitute investment advice, and investors should consult a SEBI registered advisor before making decisions.