Steel stocks outlook: Moody's anticipate that steel demand in India will grow at a 5-7?GR until 2030, fueled by infrastructure spending, construction projects and expansion in industrial production

Share price of steel companies today

Shares of steel companies Tata Steel, JSW Steel, Steel Authority of India (SAIL) and Jindal Stainless (JSL) rallied up to 4 per cent on the BSE in Friday’s intra-day trade on expectations of earnings improvement.

Shares of Tata Steel have rallied 4 per cent to Rs. 174.70 on the back of heavy volumes. The stock price of the Tata Group company was quoting close to its record high level of Rs.184.60, touched on June 18, 2024.

Shares of JSW Steel hit a new high of Rs.1,161 on the BSE in intra-day trade. In the past one month, the stock has outperformed the market by soaring 8 per cent. In comparison, the BSE Sensex was up 0.50 per cent and BSE Metal index gained 5.9 per cent during the same period.

Moody's Ratings changes JSW Steel's rating outlook to positive

JSW Steel on October 1, 2025 informed that Moody's Ratings (Moody's) has changed the outlook on JSW Steel ratings to positive from stable.

The outlook change to positive reflects JSW Steel's meaningful expansion in operating scale, reinforcing its position as India's largest steel producer. The ramp-up of operations at recently completed projects will drive higher earnings, and support sustained improvement in the company's credit metrics," says Hui Ting Sim, a Moody's Ratings Assistant Vice President and Analyst.

JSW Steel's production capacity grew by around 20 per cent over the past fifteen months to reach 35.7 million tonnes per annum (mtpa), with plans for a further increase of about 20 per cent by 2028.

The substantial increase in JSW Steel's production capacity supports its ability to meet India's growing steel demand. India is the world's second-largest steel market, with steel consumption rising over 10 per cent annually for the past four years. Moody’s expects higher sales volumes and profit margins will boost JSW Steel's earnings to about Rs. 30,000 crore in fiscal 2025-26 and Rs. 35,000 crore in fiscal 2026-27, from Rs. 22,300 crore billion in fiscal 2024-25. Lower raw material costs, reduced import competition in India and the US, and cost efficiencies will support margin improvement for JSW Steel over the next two years.

Steel sector outlook

Moody’s anticipates that steel demand in India will grow at a 5 per cent-7 per cent compound annual growth rate (CAGR) until 2030, fueled by infrastructure spending, construction projects, and expansion in industrial production to meet the needs of a rising population.

India's 12 per cent safeguard duty on certain steel imports, effective for 200 days from April, reflects the government's intent to shield the domestic steel industry from dumping practices. Moody’s expects further protective measures will be taken if competitive pressures from steel imports persist or escalate.

With the government increasing thrust towards infrastructure spending with capex to GDP ratio remaining elevated at 3.1 per cent, the demand for stainless steel continues on an upward trajectory given its exceptional qualities such as corrosion resistance, and durability, thereby making it the preferred choice for core infrastructure and major critical applications, said analysts at ICICI Securities.

The brokerage firm has a positive view on JSL amidst its market leadership and healthy demand prospects in the stainless-steel space. Analysts assigned a BUY rating on the stock with target price of Rs. 940 i.e. 12.5x Avg FY27E-28E EV/EBITDA, a tad premium given long term high growth rate drives in this domain. Shares of JSL have rallied nearly 4 per cent to ?789.10 on the BSE in intra-day trade.

Analysts also maintain a positive view on Tata Steel, driven by its strategic capacity expansion in India, levers for profitability improvement at both its Indian and European operations amid continued focus on cost optimization. Consequently, ICICI Securities has assigned a BUY rating on Tata Steel with SOTP-based target price of Rs. 200 (8x/4x EV/EBITDA to India/Europe business on FY27E).

Source: Business Standard