JSW Steel's shares saw a rise of over 1 percent on December 5, marking the second consecutive day of gains following positive brokerage reports and the announcement of a joint venture with Japan's JFE Steel. This collaboration involves JFE Steel investing Rs 15,750 crore (270 billion yen) for the transfer of Bhushan Power & Steel's (BPSL) integrated steel facility. The JV aims to transform the previously underperforming BPSL unit into a profitable entity with enhanced capacity and employment.

Through this transaction, JSW Steel plans to monetize part of its holding in BPSL to fuel the company's growth. The cash proceeds are expected to bolster the company's balance sheet and provide a clear path for future expansion, creating value for stakeholders. Motilal Oswal Financial Services highlighted that the partnership will enable JSW Steel to reduce its debt by Rs 35,000 crore and concentrate on expanding its capacity to 50 mtpa. They anticipate double-digit revenue growth in FY26/FY27, driven by capacity ramp-up and price recovery, with EBITDA margins improving to 18-19%.

Motilal Oswal maintained a 'Buy' rating with a target price of Rs 1,350. JM Financial also issued a 'Buy' rating with the same target price, emphasizing that the transaction enhances JSW Steel's liquidity and balance sheet for future growth, while ensuring the JV's independence for governance and financial clarity. Emkay Global, rating the stock 'Add' with a target of Rs 1,200, views the restructuring as unlocking value from BPSL and resetting the balance sheet, facilitating deleveraging and preparation for further capacity expansion amid strong market demand.

Yes Securities provided a 'Neutral' rating with a target of Rs 1,228, noting the creation of a clean JV platform and unlocking of BPSL's embedded value. This move significantly strengthens JSW Steel's capital structure, aiding its ongoing capex plans. Elara Capital, however, advised caution with a 'Sell' rating and a target of Rs 994, believing the recent positive developments are already priced into the stock. JSW Steel has experienced a nearly 2 percent dip in the last five days, but has gained over 20 percent in six months and approximately 29 percent in 2025 so far, with a current P/E ratio around 51.