Nomura sees China shift boosting Tata Steel, JSW Steel and Jindal Steel

Japanese brokerage Nomura says the latest signals from Beijing on property-sector support could turn incrementally positive for India’s steelmakers, even as China’s domestic economy continues to face a deeper and more prolonged slowdown. 

 

The brokerage maintained its ‘Buy’ ratings on Tata Steel stock (Target: ₹172), JSW Steel stock (Target: ₹1,170) and Jindal Steel shares (Target: ₹1,070), noting that both global and Indian demand indicators remain favourable despite near-term price softness.

 

According to Bloomberg, Chinese policymakers are assessing a new round of property easing to stabilise a sector now entering its fifth straight year of correction. The measures under discussion include mortgage subsidies for first-time homebuyers, higher tax deductions on mortgage interest, and cuts in transaction costs. 

 

 

While these steps may provide marginal relief to stressed households, Nomura analysts note they are unlikely to reverse the structural drag facing China’s property market. Developers continue to grapple with weak home prices, sluggish sales and a high debt overhang, even as consumer sentiment remains fragile.

 

October activity data from China underscores the broader economic cooling, analysts said. New home sales, property investment and home completions all recorded sharper contractions, intensifying the downturn that resumed in H2 2025 after a brief stabilisation seen following the September 2024 policy pivot. Local-government land revenue also deteriorated, while private-sector investment logged its worst monthly decline since the pandemic. Industrial indicators were similarly weak, with crude steel output and cement production both under pressure.  ALSO READ | Tejas fighter jet mishap doesn't shake HAL's long-term prospects: Choice 

Nomura says the broad-based slowdown validates earlier expectations of a sharper demand slump in the second half of the year. The slump in manufacturing investment, down 6.7 per cent Y-o-Y in October versus 7.5 per cent growth in H1, reflects the impact of Beijing’s efforts to rein in overcapacity, particularly across renewable-energy equipment and upstream industrial manufacturing. Meanwhile, new home sales plunged 24.1 per cent Y-o-Y in October, compared with a 5.5 per cent drop in H1, reinforcing the depth of the property malaise. Overall fixed-asset investment fell 11.2 per cent Y-o-Y in October, swinging from a 2.8 per cent rise in the first half.

 

Despite the extensive weakening, policy stimulus has been notably slow to arrive. Nomura’s chief China economist highlighted four key reasons behind the hesitation. First, authorities remain concerned that rapid stimulus could fuel excesses in financial markets after recent equity gains. Second, policymakers appear less confident in the wealth effect as a reliable channel to spur consumption or developer sentiment. Third, much of the leadership’s bandwidth has been tied up with the drafting of the next Five-Year Plan, limiting near-term macro focus. Lastly, Beijing’s policy toolkit is constrained by elevated financial-stability risks, restricting its willingness to rely on aggressive credit or property easing.

 

Against this backdrop, Nomura sees the emerging policy tilt as neutral-to-positive for India’s steel sector. The brokerage highlights that China’s anti-involution campaign, intended to curb inefficient capacity expansion, has already helped moderate crude steel production. Since April 2025, China’s monthly output has hovered at the lower end of its five-year range, a notable retreat from the peak levels seen in March. Any additional property-linked stimulus could further stabilise sentiment and limit downside risks to global steel pricing.

 

India, by contrast, remains on a distinctly firmer growth path. Apparent steel consumption and production continue to post steady gains, backed by healthy momentum across infrastructure, autos, construction and capital goods. Thus, Nomura expects these drivers to sustain through FY27-28 as public capex remains elevated, supply chains deepen and manufacturing capacity additions continue.

 

Although domestic steel prices have moderated in recent months, the brokerage maintains that underlying demand fundamentals remain intact and margin volatility should be manageable. With global supply gradually tightening and India’s demand outlook strengthening, Nomura reiterates its positive view on the sector.

 

Disclaimer: Target price and stock outlook has been suggested by Nomura. Views expressed are their own.