JSW Steel is one of the largest steel producers in India with a current capacity of 3.8mtpa and is also one of the largest exporters of galvanized products. We believe that significant capacity expansions, enriched product mix and backward integration initiatives into key inputs like coking coal and iron ore will be the key positives for JSW Steels growth going ahead. We expect JSW Steel to record a 28.9% CAGR in consolidated Bottomline over FY2007-10E. At CMP of Rs 935, on consolidated basis, JSW Steel is trading at an EV/EBIDTA of 4.7x on FY2010 EBIDTA and P/E of 6.8x on FY2010E consolidated fully diluted EPS. The company is trading at 20-30% discount to both its domestic and international peers, which we believe is not justified. We Initiate Coverage on the stock, with a Buy recommendation.

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