India Steel: Valuation Paradox

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India Steel: Valuation Paradox

India | Metals & Mining EquityJuneResearch9, 2026

Exhibit 1 - Stocks returns inversely correlatedIndia Steel: Valuation Paradox

to EV/EBITDA

Average stock Entry EV/EBITDA: below average Entry EV/EBITDA: above average

returns (%) 40With JSTL/TATA trading above their long-term average EV/EBITDA, high

entry valuation is a key investor concern. However, last 15-year data shows 34

19that 12-month stock returns were 15-39ppt higher when entry EV/EBITDA

was above long-term average vs below. This inverse correlation arises

as multiples expand in periods of depressed spreads, with anticipation . 1 TATA JSTL

of earning upgrades. Our FY27-28 EPS for JSTL/TATA are 13-36% above Source:report areBloomberg,over 12-monthJefferies.periodNote:andAllallstockEV/EBITDAreturnsmultiplesin the

are 1-year forward multiples based on Bloomberg consensus

street. JSTL is our top Buy in metals. unless other mentioned

High entry valuation is a key investor concern: JSTL and TATA stocks are up 68-83% in the Exhibit 2 - Best stock returns at below avg

last three years, outperforming Nifty-50 index by 44-58ppt. Post this sharp rally, both stocks Asian spreads and above avg EV/EBITDA

are above their respective long-term average EV/EBITDA multiples. JSTL is trading at 10x 1- Stock returns (%) above

TATA: 20%

JSTL: 21%year forward EV/EBITDA vs long-term average of 6.9x. Similarly, TATA is trading at 7.4x 1-year TATA:JSTL: 42% average 49% 10EV/EBITDA

forward EV/EBITDA vs long-term average of 6.3x. High entry valuation is hence a key investor belowaverage Entry aboveaverage

Asian steel spreadsconcern at current stock prices. (3)

TATA: 11% (5) TATA: -11%

JSTL: 33% JSTL: -3%

Stocks returns inversely correlated to EV/EBITDA: While rich valuation is a key investor belowaverage