Motilal Oswal said JSW Cement is India’s leading ground granulated blast furnace slag (GGBS) producer with an 84% market share. GGBS is a byproduct of the steel and iron industry and is utilised as a supplementary cement-like material.
The brokerage said GGBS significantly contributes to the company’s earnings before interest, taxes, depreciation and amortisation (EBITDA). It accounted for 34% of the company’s total revenue, and 76% to its overall Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) in financial year 2025.Motilal Oswal has estimated the GGBS EBITDA contribution to be at 63% in this fiscal, while subsequently declining to 57% and 52% in FY27 and FY28, respectively.
JSW Cement’s capacity expansion would help regional diversification for cement. The company’s present expansion plan will mark its entry into the north region, where industry profitability is better compared to the south region, the brokerage said. This will also help JSW Cement reduce its capacity concentration in the south region to 41% in FY28 from 53% in FY25.
Motilal Oswal said JSW Cement’s capital expenditure intensity will keep its debt elevated. It has estimated a capex of ₹5,600 crore during FY26-28, which would mainly be for the Rajasthan integrated unit. The remaining capex will be used for a grinding unit of Shiva Cement, a greenfield grinding unit in Punjab and brownfield capacity expansion in the south region, it said.
The brokerage has estimated net debt to be ₹5,700 crore in FY28 compared to ₹4,000 crore in FY25. The net debt-to-EBITDA ratio is estimated to remain elevated at 3 times its FY28 estimates in comparison to 3.2x in FY24 and 4.7x in FY25, it added.JSW Cement is ‘fairly valued’ according to Motilal Oswal. It expects JSW Cement’s revenue, EBITDA and volumes to grow at a Compounded Annual Growth Rate (CAGR) of 19% and 31% respectively over financial year 2025-2028.
The brokerage is valuing the stock at 15x September 2027 Enterprise Value-to-EBITDA.
In its bull case scenario, the brokerage values JSW Cement at 16x September 2027 EV/EBITDA, with a price target of ₹200, which implies a potential upside of 33.3% from its previous closing price.
The bear case projects the stock to fall to levels of ₹120, which is a 20% downside potential from current levels.
Upside and downside risks
As per the brokerage key upside risks include improvement in cement-to-coarse (C:C) ratio for existing plants and higher-than-estimated C:C ratio for the north plant; Higher-than-estimated GGBS volumes and higher utilisation for the north plant.
Meanwhile, key downside risks include pricing pressure in the south region, delay in capacity commissioning in the north or lower utilisation there.
JSW Cement shares ended the previous session 2.76% higher at ₹150.1 per share. The shares made a moderate debut on the stock exchanges last week, listing at ₹153.5 apiece on the NSE and at ₹153 per share on the BSE, a premium of 4.42% and 4% each.
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