Kotak Neo’s Shrikant Chouhan Bullish on JSW Steel and Groww Stocks

Kotak Neo’s Shrikant Chouhan Optimistic on JSW Steel and Groww Stocks

Chouhan’s insights highlight strong operational performances and growth strategies that could benefit investors.

JSW Steel: A Strong Buy Recommendation

JSW Steel, a flagship entity of the JSW Group, is recognized as one of India’s premier integrated steel manufacturers. Chouhan has set a target price of ₹1,450 for the stock, with a current market price (CMP) of ₹1,241. He notes that while the stock is facing resistance at ₹1,250-1,270 and has support levels at ₹1,210-1,190, the overall outlook remains positive.

In the first quarter of FY27, JSW Steel reported robust operational performance. However, Chouhan anticipates that margins may moderate in the second quarter due to seasonal weaknesses in long-product prices, particularly rebar, and elevated coking coal costs. Despite these near-term challenges, the company is expected to benefit from stronger domestic steel volumes, which should help mitigate some of the pressures.

Long-Term Growth Drivers

A significant factor driving JSW Steel’s investment appeal is its ambitious growth pipeline. Following the successful completion of the JFE-BPSL joint venture, the company is on track to increase its steelmaking capacity from 36.4 million tonnes per annum (mtpa) to 53.3 mtpa over the next four years. This expansion will be supported by various brownfield and greenfield projects across key locations, including Vijayanagar and Odisha.

Chouhan emphasizes that approximately 65% of the planned capital expenditure will focus on expanding steelmaking capacity, which is expected to provide a long runway for volume growth through FY30. The company’s balance sheet has also strengthened, with net debt decreasing significantly, enhancing its financial flexibility for future expansions.

Groww: A Promising Fintech Player

Chouhan is equally optimistic about Groww, a fintech platform that has been disrupting traditional retail investment barriers. With a current market price of ₹198 and a target price of ₹245, Groww operates on a direct-to-consumer model that eliminates traditional entry barriers for retail investors. The platform’s commission-free model for direct mutual funds and a flat-fee structure for equities have proven effective in attracting a large user base.

In its recently released Q2FY27 financial results, Groww reported a remarkable 54% year-on-year increase in consolidated net profit, reaching ₹725.60 crore. Operating revenue surged by 47% year-on-year to ₹1,501.53 crore, driven by diversification into margin trading facilities and commodity derivatives, which helped offset a decline in equity derivatives income due to regulatory changes.

Market Leadership and User Growth

Despite a flat sequential growth, Groww has solidified its position as a market leader by expanding its active user base to 2.4 crore transacting users and increasing total customer assets by 46% to ₹3.9 lakh crore. This impressive growth trajectory positions Groww favorably in the competitive fintech landscape.

Key Highlights

• JSW Steel’s target price set at ₹1,450, with strong operational performance expected.
• Long-term capacity expansion plans to increase steelmaking capacity to 53.3 mtpa.
• Groww reports a 54% increase in net profit, reaching ₹725.60 crore in Q2FY27.
• Active user base for Groww expands to 2.4 crore, with total customer assets growing by 46%.
• Both companies are positioned for significant growth in their respective sectors.

Investor Note: The positive outlook on JSW Steel and Groww reflects their strong operational performances and growth strategies, making them attractive options for investors looking to capitalize on the evolving market landscape.