JSW Steel
JSW
Steel Ltd (JSW), the largest privately-owned
domestic steel producer, is one of the low cost
producers of steel despite the absence of captive
raw material sources. Significant investments in
upstream and downstream processes are expected to
lower JSW's conversion cost further and improve
blended realisations, positioning it appositely to
outperform the industry. The additional growth
drivers are operational expertise, synergetic
acquisitions and expansions. Further, we expect
its RoE to improve over the next two years.
- Cost optimization by integration and advancement in value chain to expand margins
- Growth to be sustained by expansion and synergistic acquisitions
- Risks
- Upside: Backward integration into iron ore mines
- Downside: Further disruption in iron ore supply in India
- Revenues
to grow at two-year CAGR of 7.3%; fair value
estimated at
1,442.
Technically the stock is showing some positive strong.
Parabolic SAR shows pressure from bullish buyers.
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