Shares of JSW Cement Ltd. gained nearly 2% on Tuesday, August 19, after brokerage firm Motilal Oswal Financial Services (MOSL) initiated coverage on the newly-listed stock with a ‘Neutral’ rating and a target price of ₹163, implying a potential upside of about 9% from Monday’s close.
MOSL highlighted that JSW Cement is India’s largest manufacturer of Ground Granulated Blast Furnace Slag (GGBS), holding nearly 84% market share. GGBS, a byproduct of the steel and iron industry, serves as a supplementary cementitious material, providing greener solutions to the construction sector.
The brokerage noted that GGBS is the key earnings driver, contributing 34% of JSWC’s FY25 revenue but a higher 76% of its EBITDA. Going forward, MOSL expects GGBS EBITDA contribution to gradually decline to 63% in FY26, 57% in FY27 and 52% in FY28 as cement operations expand.
To strengthen regional diversification, JSW Cement is aggressively expanding capacity, particularly with its upcoming Rajasthan integrated unit that will mark its entry into the north Indian market — a region known for stronger profitability compared to the south. This expansion is expected to reduce its dependence on the south from 53% in FY25 to 41% by FY28.
However, MOSL cautioned that the company’s capital expenditure intensity will keep leverage high, estimating ₹5,600 crore capex between FY26–28, primarily directed towards the Rajasthan unit, along with expansions at Shiva Cement, Punjab, and brownfield projects in the south. As a result, net debt-to-EBITDA is expected to remain elevated at 3.0x in FY28, compared to 3.2x/4.7x in FY24/FY25.
Looking ahead, MOSL estimates 19% revenue CAGR and 31% EBITDA CAGR over FY25–28, supported by both cement expansion and stable earnings from GGBS. Assigning a 15x Sep’27E EV/EBITDA multiple, the brokerage values the stock at ₹163.
