Motilal Oswal's research report on JSW Cement
JSW Cement’s (JSWC) 1QFY26 revenue/EBITDA increased ~8%/39% YoY to INR15.6b/INR3.2b. EBITDA/t surged ~29% YoY/45% QoQ to INR975. OPM was up 4.6pp YoY at ~21%. Adjusted PAT (exceptional fair value loss arises from conversion of CCPS into equity share of INR14.7b) stood at INR1.1b as compared to net loss of INR151m in 1QFY25. Management indicated that a good monsoon, increased government infra spending, and GST reforms bode well for the industry’s demand outlook. It anticipates cement demand growth at 6.5%-7.5% in FY26. Its cost saving (increase in green power, AFR usages, lead distance optimization) and revenue growth (introduction of premium products) initiatives are likely to yield INR400/t over the next two years. In terms of expansions, Sambalpur GU (1.0mtpa) is expected to be commissioned in Sep’25, while Nagaur integrated plant (3.3mtpa/3.5mtpa clinker/grinding) is expected to be commissioned in FY26.
Outlook
We recently initiated coverage on JSWC with Neutral rating. We maintain our earnings estimates. At CMP, the stock is trading at 17x/14x FY27E/FY28E EV/EBITDA. We value it at 15x Sep’27E EV/EBITDA to arrive at our TP of INR163. Maintain Neutral.
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