Target: ₹163

CMP: ₹156.55

Leveraging JSW Group’s presence in steel manufacturing, JSW Cement (JSWC) is the largest supplier of Ground Granulated Blast Furnace Slag (GGBS) in India with about 84 per cent market share in FY25. The product is manufactured from slag, a byproduct of the steel-making process. GGBS accounted for about 34 per cent of JSWC’s total revenue in FY25, though we believe that its contribution to EBITDA was higher at ~61 per cent/76 per cent in FY24/FY25. We estimate GGBS EBITDA contribution to be at 63/57/52 per cent in FY26/FY27/FY28.

The company’s current expansion plans will mark its entry into the North region, where industry profitability is better compared to the South region. It will also help JSWC reduce its capacity concentration in the South region to about 41 per cent in FY28 from around 53 per cent in FY25.

We expect a higher cost of limestone for the North plant (₹210/t+ higher as mines have been acquired through e-auction) to be offset by state incentives (₹273/₹140 per tonne in FY27/28E) as new cement plants in Rajasthan are eligible for State incentives for seven years.

Considering the aggressive expansion plans of JSWC and earnings stability due to its exposure in GGBS, we value it at a higher multiple of 15x Sep’27E EV/EBITDA to arrive at our TP of ₹163. We initiate coverage on JSWC with a Neutral rating.

Published on August 19, 2025