JSW Steel Ltd.
ISIN: INE019A01038 • Market Cap: ₹3.13 Lakh Cr
The 5-Pillar Quality Audit for JSW Steel Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (16.7%), Return on Capital Employed (10.7%), and equity compounding (22.3%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.96 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (2.7%) and 3Y PAT CAGR (47.8%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 12.64 vs PEG of 0.88 and Dividend Yield of 0.6%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 44.3%, backed by 37.9% institutional ownership.
Key Fundamental Strengths
Robust Equity Compounding (ROE: 22.3%)
Shareholder equity compounds at a healthy 22.3%, exceeding average Indian equity benchmarks.
High-Velocity Profit Compounding (3Y PAT CAGR: 47.8%)
Net earnings have compounded at 47.8% annualized, demonstrating operating leverage.
Attractive Valuation Margin (P/E: 12.64)
Trading at a P/E multiple of 12.64, the stock offers a favourable risk-reward entry for quality compounding.
Deep Institutional Sponsorship (37.9%)
Mutual funds, domestic DIIs, and foreign FIIs hold 37.9%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: 10.7%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Elevated Financial Gearing (D/E: 0.96)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Topline Stagnation (3Y Sales CAGR: 2.7%)
Revenue growth has slowed below inflation rates, indicating cyclical demand slowdown or saturated core markets.
Quantitative Strategy Eligibility
Checking JSWSTEEL against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 73/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Metals & Mining Sector Peer Comparison
Compare JSWSTEEL directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| JSW Steel Ltd. (JSWSTEEL)Current | 73/100 | ₹3.13 Lakh Cr | 12.64 | 10.7% | 0.96 | — |
| Adani Enterprises Ltd. (ADANIENT) | 58/100 | ₹4.03 Lakh Cr | 54.17 | 5.1% | 1.07 | View |
| Hindustan Zinc Ltd. (HINDZINC) | 88/100 | ₹2.34 Lakh Cr | 13.72 | 62.3% | 0.37 | View |
| Hindalco Industries Ltd. (HINDALCO) | 71/100 | ₹2.33 Lakh Cr | 14.19 | 12.7% | 0.71 | View |
| Tata Steel Ltd. (TATASTEEL) | 62/100 | ₹2.30 Lakh Cr | 20.82 | 11.9% | 0.84 | View |
| Jindal Steel Ltd. (JINDALSTEL) | 58/100 | ₹1.14 Lakh Cr | 41.77 | 8.8% | 0.43 | View |
Frequently Asked Questions: JSW Steel Ltd.
Q:What is the 5-Pillar Fundamental Score for JSW Steel Ltd. (JSWSTEEL)?
JSW Steel Ltd. has a RupeeTools Fundamental Score of 73/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (69/100), Financial Health (69/100), Growth (70/100), Valuation (85/100), and Ownership Quality (78/100).
Q:Is JSWSTEEL fundamentally strong for long-term investment?
Yes, JSWSTEEL exhibits solid fundamental strength with a 73/100 score, driven by a return on equity of 22.3% and a debt-to-equity ratio of 0.96.
Q:Does JSWSTEEL pass the Coffee Can Investing filter?
No. JSWSTEEL does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does JSWSTEEL compare against other Metals & Mining peers?
Within India's Metals & Mining sector, JSWSTEEL trades at a P/E of 12.64 and generates an ROCE of 10.7%. Compare its 5-Pillar score of 73/100 against top sector peers like Adani Enterprises Ltd. (58/100), Hindustan Zinc Ltd. (88/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.