What Are Steel Stocks?

Steel stocks are shares of companies that engage in the steel sector. Steel is a basic material utilized in a variety of applications across the world, including buildings, bridges, vehicles, and heavy machinery. The steel stocks refer to the shares of the companies that employ iron ore and scrap steel to make steel products.

 

Why Invest in Steel Stocks?

Investing in steel stocks offers many benefits to investors. Here are the top reasons why you must invest in steel stocks:

• Infrastructure Drive: Economic growth has brought its focus on projects like smart cities, housing for all, and improved transportation. Hence demand for steel as raw materials and intermediate products will increase.
• Demand for Export: Due to competitive pricing, many Indian steel companies have a substantial share of the export market. 
• Self-reliant Policies: Government initiatives like "Make in India" and “Atmanirbhar Bharat,” which have increased focus on domestic manufacturing, will positively impact the steel sector.
• Dividend Yield Returns: Large Cap companies in the steel sector often provide dividends which can be a steady source of income for investors.

you can also find Best PSU stocks in India

What are the Best Steel Stocks in India?

Here is a list of the best steel stocks in India to invest in:

Best Steel Stocks	Market Cap	Share Price	PE Ratio (%)	NSE Symbol
JSW Steel Ltd	₹2.22LCr	₹910.05	25.16	JSWSTEEL
Tata Steel Ltd	₹2.27LCr	₹181.60	22.81	TATASTEEL
Jindal Steel And Power Ltd	₹1.01LCr	₹1,009.50	17.07	JINDALSTEL
Steel Authority of India Ltd	₹62.41KCr	₹151.40	20.40	SAIL
Jindal Stainless Ltd	₹65.67KCr	₹797.50	24.21	JSL
Bharat Forge Ltd	₹74.69KCr	₹1,604.30	78.53	BHARATFORG
KIOCL Ltd	₹25.82KCr	₹424.50	25.32	KIOCL
NMDC Steel Ltd	₹17.45KCr	₹59.70	-	NSLNISP
Jai Balaji Industries Ltd	₹15.59KCr	₹903.80	18.14	JAIBALAJI
Shyam Metalics and Energy Ltd	₹17.66KCr	₹635.15	16.10	SHYAMMETL

 

Top Steel Stocks in India to Invest In: Overview

Here is an overview of the best steel stocks in India you must consider before investing:

 

1. Tata Steel

Tata Steel is among the world’s top steel-producing companies, with a production capacity of around 35 million tonnes. Its shares have rallied 66.94% in a year and risen 25% in 2024. With a robust financial background, global presence, and steady stock performance in the last 5 years, the stock looks promising in the long run.

 

2. Jindal Stainless

Jindal Stainless has a presence in India and 16 other countries. Being a large-cap stock, it has a strong financial performance with a revenue of ₹38,562.47 Crore and a net profit of ₹2,713.21 Crore in the last 12 months. Jindal Stainless appears to be a promising investment for long-term growth due to its stable debt-to-equity ratio and strong cash reserves.

 

3. APL Apollo Tubes Limited

APL Apollo is one of the largest producers of structural steel tubes in India. Being present in 29 cities across India and 20 other countries worldwide, they produce over 1,100 different varieties of steel products. In the longer term, analysts believe that APAT is a good buy as it would sustain its earnings momentum on the back of growing demand across segments.

 

4. JSW Steel

JSW Steel Ltd has a steel-producing capacity of 28 million tonnes per annum (MTPA). The company offers an entire range of steel products. JSW Steel plans to scale up its capacities to 50 million tonnes per annum by the end of this decade, expecting a growth rate of 8-10%. This ambitious plan entails an additional capex of over ₹1 lakh crore.

Criteria for Selecting Steel Stocks in India

Steel stocks have unique qualities that make them attractive investment opportunities. However, you must still consider these factors before investing in the top steel stocks in India:

• Financials: The fundamentals of the company such as the balance sheet along with the cash flow statements need to be analyzed carefully for debt, promoter share pledge, free cash, etc.
• Technicals: Investors should investigate the technicals, such as moving averages, resistance, and support for each stock, before making an investment decision.
• Government Policy: Review government policies for customs duty, export duty, anti-dumping duty, production sops, etc.
• Raw Materials: Availability and prices of raw materials can be vital factors for the financials of a steel company and hence its stock price.
• Overseas Price Dynamics: Metal prices in India are mostly linked to prices prevailing overseas. Hence any international metal price fluctuation can have a great impact on steel stocks in India.

 

Conclusion

While investing in steel stocks presents an opportunity for long-term capital appreciation, it comes with its fair share of market risks and volatility. Therefore, it is crucial to conduct thorough research on the specific stocks before investing.

Disclaimer: This blog is posted solely for educational purposes. The securities mentioned are examples and not recommendations. It is based on various secondary sources from the internet and is subject to change. Kindly consult an expert before making any related decisions.