Motilal Oswal Securities  has maintained 'Buy' on JSW Steel with target price Rs 1,646 a share against market price of Rs 1,287 a share on August 20.

JSW Steel has entered into a definitive agreement with Welspun (WEL) to acquire its entire equity stake in Welspun Maxsteel (WMSL) for an EV of Rs 10 billio and net working capital (as on Aug. 31, 2014).

Commenting on investment rationale, Motilal Oswal  said, "We believe JSTL (and Tata Steel) is among the few Indian steel mills, though leveraged, which is not stressed and has strong cash flows to fund its capex. JSTL, with its market leadership in flat products and new investment in downstream value-added products, is well positioned to capture the opportunities arising from expected acceleration in Indian steel demand growth. Maintain Buy.''

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