Tata Steel vs JSW Steel: Share price targets, technicals, valuation, financial metrics and more

Shares of metal majors Tata Steel Ltd and JSW Steel Ltd rallied in line with the benchmark indices on Monday. While Tata Steel stock hit a record high, shares of JSW Steel approached their record high in the afternoon session today. Both metal stocks were among the top Sensex gainers in Monday’s trade. In terms of valuation, Tata Steel shares have a price to book (PB) ratio of 1.98. JSW Steel has a PB ratio of 3.25.

Here’s a look at key metrics, which reflected the financial health of both metal majors as of December 31, 2023.

Debt to equity ratio

The debt to equity ratio of Tata Steel stood at 0.29 as of December 31, 2023 lower than 0.32 as on December 31, 2022. On the other hand, ratio of JSW Steel stood at 1.17 as of December 31, 2023 lower than the 1.23 as on December 31, 2022.

Current ratio

The current ratio of Tata Steel stood at 0.78 in the last quarter against 0.78 in the December 2022 quarter. In the case of JSW Steel, the current ratio fell to 0.94 in the last quarter against 1.08 in the December 2022 quarter.

Earnings per share

Tata Steel’s EPS rose to Rs 3.73 in Q3 against 1.89 in the December 2022 quarter. JSW Steel’s EPS rose to 9.92 in Q3 against 2.04 in Q3 of the last fiscal.

Interest service coverage ratio

Interest service coverage ratio of Tata Steel stood at 9.12 as on December 31, 2023 against 5.74 on December 31, 2022. JSW Steel’s interest service coverage ratio stood at 4.15 as on December 31, 2023 against 3.33 on December 31, 2022.

Total debt to total assets ratio

Total debt to total assets ratio of Tata Steel stood at 0.19 as on December 31, 2023 against 0.20 on December 31, 2022. JSW Steel’s total debt to total assets ratio stood at 0.40 as on December 31, 2023 against 0.39 on December 31, 2022 .

STOCK MOVEMENT

Tata Steel stock ended 4.62% higher at Rs 163.20 on BSE today. The metal stock is trading neither in the oversold nor in the overbought territory as the relative strength index (RSI) of Tata Steel stands at 61.6. The stock has gained 56% in a year. Market cap of Tata Steel rose to Rs 2.03 lakh crore amid a rally in the broader market today. A total of 67 lakh shares of the firm changed hands amounting to a turnover of Rs 108.12 crore on BSE. Tata Steel stock has a one-year beta of 0.9. This signals the stock has low volatility.

The large cap stock stands higher than the 5 day, 10 day, 100 day, 150 day and 200 day moving averages.

On the other hand, JSW Steel stock ended 4.81% higher at Rs 871.30 on BSE. The metal sector stock is trading neither in the oversold nor in the overbought territory as the relative strength index (RSI) of JSW Steel stands at 56. Market cap of JSW Steel stood at Rs 2.13 lakh crore on BSE.

JSW Steel stock has a one-year beta of 0.6. This signals the stock had low volatility during the period. The large cap stock stands higher than the 5 day, 10 day, 100 day, 150 day and 200 day moving averages.

Here is a look at what analysts said on the prospects of both metal stocks.

Tata Steel

Aditya Gaggar, Director of Progressive Shares expects the stock to hit the Rs 214 mark.

“In March, metal giant Tata Steel gave a breakout from the Rounding Bottom Formation which was confirmed with a trendline breakout in RSI and an upsurge in volume. Trend following indicator MACD has already given a positive crossover and a reading of 25 in ADX further confirms the presence of the strong uptrend. As per the pattern breakout, the target is Rs 214, said Gaggar.

Gaurav Bissa, VP, InCred Equities said, “Tata Steel has one of the best performing large cap stocks in recent times. It witnessed some consolidation after a stupendous rise from Rs 25 levels since 2020. This resulted in formation of a bullish pennant pattern which is a continuation pattern in nature. Tata steel has confirmed a breakout on the monthly charts which can propel it towards Rs 200 levels in the medium term. It has made a small swing high on weekly charts implying it can move towards Rs 175 till it holds Rs 158 levels in the near term.”

Abhijeet from Tips2Trades said, “Tata Steel stock price looks bullish on the daily charts with strong support at Rs 156. A daily close above the resistance of Rs 167 could lead to a target of Rs 181 in the near term.”

JSW Steel

Rahul Ghose, CEO, Hedged.in said, “The JSW steel counter has been a slow and steady uptrend for the last two years since 2022 June. The stock in the recent past has had difficulty crossing the 850 mark which is its near term resistance . The plus point in the current price structure of the chart is that the stock is currently trying to form a conventional technical ‘Inverse head and shoulder pattern’. This is a bullish pattern which coincidentally coincides with this Rs 850 level. One can initiate a long on the stock once prices close above the Rs 850 mark with a bullish candle keeping a stop loss at Rs 825.”

Abhijeet from Tips2Trades said, “JSW Steel stock price looks bullish on the daily charts with strong support at Rs 807. A daily close above resistance of Rs 845 could lead to a target of Rs 888 in the near term.”

Riyank Arora Technical Analyst at Mehta Equities said, “The stock is consolidating well in its triangular consolidation formation. According to the weekly charts, the breakout level is placed at the Rs 842.50 mark and a minor support lies near Rs 815, below which the next major support is placed at the Rs 785 mark. Overall, the trend looks positive and the stock should eventually head towards Rs 850 and Rs 880 after it has given a breakout above that Rs 842.50 level. A strict stop loss should be kept at Rs 785 for all the positional trades.”