Metal Stock to Buy: Brokerage firm Jefferies has adopted a positive stance on the metal sector with the beginning of the new year 2026. The brokerage has selected three companies from the metal sector as its top choices. These include Tata Steel, JSW Steel and Jindal Stainless.
The brokerage has set a target price of Rs 230 for Tata Steel shares, which shows a potential upside of about 26% from the current levels. Whereas for JSW Steel, it has kept a target price of Rs 1,400, which estimates a possible upside of about 18%. Jefferies has given a target price of Rs 1,020 for Jindal Stainless shares, which indicates an upside of about 20%.
Jefferies believes that the volume growth of Indian steel companies could be at a CAGR of 6% to 9% between financial years 2026 to 2028. Apart from this, the recently re-imposed safeguard duty is expected to support domestic steel prices. The brokerage also estimates that steel spreads in Asian markets, which are currently at a 15-year low, may show recovery from there.
In the report, Jefferies has also pointed to an interesting historical trend. In the last 18 years, whenever Tata Steel or JSW Steel shares were bought at a time when the spreads were below Rs 200 per tonne, these shares have given good returns in the next one year.
The brokerage has also revised its earnings (EPS) estimates in view of the improved price outlook. Jefferies has raised the EPS of Tata Steel and JSW Steel by 9% and 17% for FY 2027 and 2028, respectively. This estimate has been made assuming strength in steel prices and Indian hot rolled coil (HRC) price at ₹54,000–₹54,500 per tonne, while the spot price is currently around ₹48,500 per tonne.
Additionally, the brokerage has also raised FY2027-28 EPS estimates for Hindustan Zinc and Hindalco Industries by 4% to 7% to include the impact of higher silver and aluminum prices.
status of shares
Tata Steel was trading at ₹185, up about 1.1% in early trade today on January 5 and the stock is up nearly 40% in the last 12 months. Shares of JSW Steel were seen up 0.4% at ₹1,184, while Jindal Stainless was seen trading nearly 1% stronger at ₹864.3.
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