Tata Steel, JSW Steel, SAIL in spotlight after Morgan Stanley, HSBC revise target prices

Steel stocks could remain in focus after global brokerage firms Morgan Stanley and HSBC reiterated their positive stance on the sector, citing improving demand prospects and expectations of stronger steel prices after the monsoon season.

Both brokerages remain constructive on major steel producers, although they continue to differ on some names such as Steel Authority of India Ltd (SAIL).

Morgan Stanley raises targets on key steel stocks

Morgan Stanley maintained its 'Overweight' rating on major private steelmakers and increased target prices across its coverage universe.

The brokerage raised its target price on Jindal Steel & Power to Rs 1,340 from Rs 1,250 while maintaining an 'Overweight' rating. The stock was trading at around Rs 1,121.

For JSW Steel, Morgan Stanley retained its 'Overweight' recommendation and increased the target price to Rs 1,470 from Rs 1,330. The stock was trading near Rs 1,269.

The brokerage also maintained its 'Overweight' rating on Tata Steel and raised the target price to Rs 235 from Rs 215. Tata Steel shares were trading around Rs 199.

However, Morgan Stanley continued to remain cautious on Steel Authority of India Limited. The brokerage maintained its 'Underweight' rating on the stock, though it increased the target price to Rs 160 from Rs 140. SAIL shares were trading near Rs 181.

HSBC sees better pricing environment after monsoon

HSBC said steel price declines during the monsoon season are likely to remain muted due to production constraints across the industry.

The brokerage, however, flagged elevated coking coal prices as a key concern for steel manufacturers, as higher raw material costs could weigh on margins.

Despite the cost pressure, HSBC expects domestic steel prices to increase after the monsoon season, which could support earnings for major steel producers.

HSBC remains positive on Tata Steel, JSW Steel

HSBC maintained its 'Buy' rating on Tata Steel with a target price of Rs 260, implying potential upside from current levels.

The brokerage also retained its 'Buy' recommendation on JSW Steel and set a target price of Rs 1,540.

On SAIL, HSBC maintained a 'Hold' rating with a target price of Rs 200.