Steel Stocks Surge Up to 4%
In response to growing infrastructure demand, steel stocks such as Jindal Stainless, Jindal Steel, SAIL, and Tata Steel surged up to 4%. India's steel industry has significant long-term growth potential despite short-term price pressure.
MARKET NEWS
12/31/20251 min read
In intraday trading on Monday, steel companies such as Jindal Stainless, Jindal Steel & Power, SAIL, and Tata Steel surged up to 4%, defying a poor overall market. While SAIL increased 3.3% to ₹138.60, Jindal Stainless subsequently rose 2% to ₹1,013, JSW Steel gained 1% to ₹1,101, while the BSE Sensex fell 0.21%. Jindal Stainless, however, rose 4% to ₹824 on quadrupled trade volumes, approaching its 52-week high.
Key Trigger: Capacity Expansion
By the middle of 2028, Jindal Steel intends to quadruple its structural steel capacity at its Raigarh factory in Chhattisgarh from 1.2 MTPA to 2.4 MTPA. In addition to reducing India's dependency on imported heavy sections, this expansion aims to meet the growing demand from infrastructure, energy, refineries, electricity, renewables, transmission, and high-rise buildings.
Industry and Outlook
In the midst of an 8% demand increase forecast by ICRA for FY2026 (11–12 MTPA additional), India's steel industry just installed a record ~15 MTPA capacity, with another 5 MTPA due by the fiscal end. Prices have been under pressure due to a temporary excess, but heavyweights like Tata Steel still have bright long-term prospects due to efficiency improvements and domestic demand.
Near-Term Challenges
Low steel prices, high input costs, and poor exports make for a challenging operating environment, according to ICRA. Despite the dangers associated with international tariffs, brokerages such as Motilal Oswal remain optimistic about Tata Steel's strategic actions for long-term value.