JSW Steel leads market focus: 17% output jump, Morgan Stanley upgrade, 95% utilization

Market spotlight: JSW Steel’s August surge

JSW Steel set the tone for the session with numbers that stood out in a tough global steel cycle. The company reported a 17% year-on-year jump in crude steel production for August 2025. Indian operations delivered 2.6 million tonnes, while the combined group reached 2.7 million tonnes. Capacity utilization hit 95%, signaling strong demand and smooth plant operations. A big driver: new capacity ramp-up at the Vijayanagar plant and the commissioning of the second converter on August 30, which pushed India crude steel capacity to 34.2 MTPA and, crucially, made it fully operational.

That operational progress got quick validation from the Street. Morgan Stanley upgraded the stock to Overweight and set a ₹1,300 price target, about 26% above the September 8 close of ₹1,107. Their call rests on three planks—healthy domestic demand, supportive steel spreads, and policy tailwinds from global decarbonization. They also flagged a preference for JSW over peers due to its heavier India exposure and clearer near-term growth runway, even if the valuation looks rich on standard metrics.

The charts backed up the fundamentals. SEBI-registered analyst Deepak Pal noted the stock broke out of a sideways phase and is now trading above key moving averages. Momentum gauges firmed up: RSI around 66 and MACD trending higher. That puts ₹1,135–₹1,150 in sight for traders watching the next leg, with the recent breakout zone likely to act as support on dips.

Under the hood, the production beat was not a one-off. The company has been executing a multi-year capacity buildout, and it’s not done. Management’s roadmap points to 43.4 MTPA by 2026. What stands out is the 10 MTPA “green steel” project meant to fit the new rules of trade—especially the EU’s Carbon Border Adjustment Mechanism (CBAM) and the U.S. shift to cleaner procurement. For an exporter, designing for carbon rules is no longer optional; it’s a ticket to sell into advanced markets once financial penalties under CBAM kick in from 2026.

There’s a cost to that future-proofing. Expansion at this scale demands capital. The company faces a roughly ₹25,000 crore capex requirement tied to this phase. That means investors will track cash flows, leverage, and commissioning timetables with a fine-tooth comb. Any delay in start-up or teething issues at new units can dent returns. Compliance costs tied to low-carbon steelmaking will also rise as reporting moves to real money under CBAM.

Still, the setup on the demand side is friendly. Domestic drivers are intact—roads, rail, housing, renewables, and auto are all steady steel consumers. Infrastructure projects keep absorbing long products, while autos and appliances support flat products. If spreads hold and raw material costs stay reasonable, earnings leverage can show up quickly when utilization is already near the mid-90s.

Risks haven’t gone away. Coking coal prices can swing hard and fast, the rupee affects imported inputs, and any China-driven glut can weigh on global prices. Policy is another wild card. India briefly used export duties in 2022 to cool prices at home; a repeat would crimp margins and exports. For now, the market seems comfortable with the risk-reward as the stock is already up 21.5% in 2025, reflecting confidence in execution.

What could move the stock next? A few potential catalysts stand out:

• Steady month-on-month production and sales as the newly commissioned converter stabilizes
• Updates on the green steel roadmap, including technology choices and commissioning schedules
• Commentary on spreads, especially if China cuts output or if global demand firms into Q4
• Any signs of easing in coking coal costs or improved blending strategies
• Debt and capex phasing—how the company funds growth without stretching the balance sheet

On valuation, the debate is familiar. Bulls say the company deserves a premium for scale, execution, and domestic skew, which helps reduce policy and currency shocks versus export-heavy peers. Bears point to the up-cycle risk: if spreads roll over just as capex peaks, cash returns can lag. That tug-of-war will likely continue, but with utilization near full and fresh capacity coming online, operational updates may matter more than macro takes in the near term.

For traders, the technical setup offers simple levels. Above the breakout zone, momentum players will eye the ₹1,135–₹1,150 band flagged by Deepak Pal. A sustained close above that range could invite follow-on buying. On the downside, watch the cluster of moving averages that recently flipped into support—slips back below them would question the breakout and could trigger a reset toward prior consolidation lows.

What traders are watching in Mahindra Logistics and Aditya Infotech

Mahindra Logistics and Aditya Infotech were also on the market’s radar, though there were no fresh public filings or detailed updates at the time. In such cases, watchlists tend to form around expected news flow—order wins, new partnerships, or quarterly business updates. With logistics, investors usually care about contract additions from large e-commerce and consumer clients, network expansions into Tier-2 and Tier-3 cities, and any read-through on freight rates or last-mile costs.

For Mahindra Logistics specifically, two dials matter: volume growth in contract logistics and margin discipline. The sector is in a tight spot—diesel costs, warehouse rentals, and seasonal demand swings can squeeze margins even when revenue rises. Signals of better asset utilization, automation in warehouses, or integration wins with key customers can change sentiment fast.

Aditya Infotech, a well-known distributor in electronic security and surveillance, tends to move on distribution tie-ups, supply chain improvements, or government and enterprise orders in cameras and related equipment. Traders will look for any commentary on inventory cycles, channel financing, and pricing power, especially if global component supply tightens again. Until there’s a formal update, price action may be more rumor than reality, so position sizing becomes the main risk tool.

If new disclosures land from either company, the first checks are simple: revenue visibility from fresh contracts, margin guidance for the next two quarters, and cash conversion. These checkpoints often matter more than headline order values because they tell you whether growth sticks and whether it adds to or drains cash.

Bottom line for the day’s focus basket: JSW Steel set a high bar with hard numbers and a big-broker upgrade, while Mahindra Logistics and Aditya Infotech stayed in the “wait for news” camp. For investors, the next few weeks are about tracking production prints, capex milestones, and any hints on spreads. For traders, the levels are clear—and the tape will do the talking.