Tata Steel vs JSW Steel vs NMDC: Which metal stock is JP Morgan bullish on?

JP Morgan has raised Tata Steel's share price target to ₹195 from ₹180, implying an upside potential of 14 per cent from current levels.

JP Morgan has stepped up its bullish stance on India's steel majors -- raising target prices and reaffirming 'Overweight' rating on Tata Steel, JSW Steel, and Hindalco -- while staying cautious on miners like NMDC, and Coal India.

 

The brokerage has raised Tata Steel's share price target to ₹195 from ₹180, implying an upside potential of 14 per cent from current levels.

 

Similarly, it has increased target price on JSW Steel to ₹1,250 from ₹1,100 (7 per cent upside potential) and on Hindalco to ₹810 from ₹715 (5 per cent upside potential), citing supportive macro trends for base metals.

 

 

In contrast, NMDC and Coal India remain among JP Morgan's least preferred stock picks in the metal space.

JP Morgan on steel sector

JP Morgan's positive outlook on the Indian metal majors is driven by several factors that benefit integrated steel companies. The sector, it believes, is poised to benefit from China's anti-involution policy, extended steel safeguard duties, along with other global tailwinds.

 

On the bourse, metal stocks have outpaced the broader Nifty50 index over the past six months, where the Nifty Metal rose 20 per cent as compared to Nifty's rise of 8 per cent. The rally, according to JP Morgan, was aided by supportive policy measures and expectations of a spread expansion cycle.

 

Among individual stocks, JP Morgan sees multiple tailwinds for Tata Steel. In Europe, potential cuts to European Union (EU) steel import quotas and higher tariffs could push steel prices higher, complementing the company's ongoing cost-transformation program. Back home, the recent goods and services tax (GST) rate cuts could bolster auto demand, benefitting Tata Steel given its sizable exposure to the automotive segment (20–25 per cent of sales). 

In Europe, according to the brokerage a potential reduction in steel import quotas and increased tariffs could lift hot rolled coil (HRC) prices to €640/t in Q1CY26, as compared to vs €570/t spot. Tata Steel’s cost transformation program should also drive UK Earnings before interest, tax, depreciation and amortisation (Ebitda) breakeven by Q4FY26, according to brokerage.

 

For JSW Steel, volume outperformance remains a key pillar, noted JP Morgan. The company's crude steel production is up 16 per cent year-to-date (Y-T-D) in FY26 through August, outpacing industry growth of 12 per cent. Further, the Supreme Court's nod to JSW's resolution plan for Bhushan Power & Steel removes a lingering overhang.

 

"We believe the JSW Steel stock can continue to trade at multiples higher than peers as it is demonstrating volume outperformance and its capacity expansion plans are on track," the brokerage note said.

 

On aluminum, favourable USD/INR dynamics (US Dollar appreciation against India Rupee), and firmer base metal prices have buoyed sentiment, even as Novelis faces near-term challenges. JP Morgan expects Hindalco's India franchise to offset some of the overseas headwinds through structural profitability gains from captive coal and a richer downstream mix.

 

However, the brokerage remains wary of miners. It flags softer September volumes at Coal India, weak international thermal coal prices, and elevated inventories at power plants. For NMDC, despite a rebound after strike-related disruptions in FY25, JP Morgan stays 'Underweight' amid expectations of lower iron ore prices in FY27–FY28 and risks from rising imports and domestic competition.