Jindal Steel and Power Faces Brokerage Downgrade Despite Expansion Push

Jindal Steel and Power Ltd. (JSPL) shares attracted significant investor attention on December 26, 2025, after Kotak Securities revised its target price downward while maintaining a positive long-term stance on the stock. The Mumbai-headquartered brokerage reduced its target price from ₹1,250 to ₹1,150 per share but reiterated its ‘Buy’ recommendation. This adjustment came in response to a noticeable softening in domestic steel prices during the third quarter of the financial year 2025–26 (October–December 2025), which market participants expect to put temporary pressure on the company’s profitability and margins in the near term.

The primary reason behind the target price cut is the prevailing weak pricing environment in the steel industry. Kotak Securities noted that these short-term headwinds are likely to weigh on JSPL’s financial results for the ongoing quarter, as lower realization levels offset operational strengths. Despite this cautionary near-term view, the brokerage highlighted that the company’s aggressive capacity expansion program—particularly the ongoing projects at its Angul plant in Odisha—continues to form the foundation of its growth story. These additions include major units such as blast furnaces, basic oxygen furnaces, and downstream facilities, aimed at significantly increasing crude steel production capacity in the coming years.

Looking beyond the immediate challenges, Kotak Securities remains optimistic about JSPL’s medium- and long-term trajectory. The firm believes the ramp-up of new capacities will deliver substantial volume growth and higher sales, which should help counterbalance softer commodity prices and eventually pave the way for a meaningful recovery in earnings and margins. JSPL’s integrated business model, supported by captive coal mines, captive power generation, and an efficient logistics network, provides a strong cost structure that is expected to offer resilience during periods of price volatility.

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As of the latest sessions in late December 2025, JSPL shares had posted year-to-date returns of approximately 6 percent, trading in the range of ₹1,000–₹1,013. The revised target of ₹1,150 suggests a potential upside of roughly 15 percent from those levels. The development reflects the typical cyclical nature of the steel sector, where short-term price corrections frequently coexist with structural growth opportunities driven by capacity expansion and rising domestic steel consumption. Investors will now await the company’s third-quarter results for further clarity on how pricing pressures are playing out against the backdrop of ongoing project execution.

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