The brokerage firm Motilal Oswal has initiated coverage on JSW Cement, giving it a Neutral rating with a target price of Rs 163 per share. According to the brokerage, this translates into an upside potential of about 9% from current market levels.
Let’s take a look at what the brokerage say on the stock –
Motilal Oswal on JSW Cement: Expanding footprint in North India
As per the brokerage report, JSW Cement is preparing to enter the North Indian market, an area where industry profitability is relatively stronger compared to the South. The brokerage noted that this move will help the company diversify its presence.
“JSWC’s capacity concentration in the South will fall from ~53% in FY25 to ~41% in FY28,” Motilal Oswal noted. The new Rajasthan plant, however, comes with a higher limestone cost, but state incentives are expected to offset these expenses for the next seven years.
Motilal Oswal on JSW Cement: Heavy capex to keep debt elevated
Motilal Oswal expects Rs 5,600 crore of capital expenditure between FY26-28.
This will be mainly for the Rajasthan integrated unit, along with new grinding facilities in Punjab and expansions at Shiva Cement.
“Net debt is estimated to rise to Rs 5,750 crore by FY28 versus Rs 4,070 crore in FY25. Net debt-to-EBITDA will likely remain elevated at 3x in FY28,” the report said.
Motilal Oswal on JSW Cement: Strong revenue and EBITDA growth ahead
Over FY25-28, the brokerage expects JSW Cement’s revenue to grow at 19% CAGR and EBITDA at 31% CAGR, supported by volume growth in both cement and GGBS.
“We estimate a profit of ~Rs 300 crore in FY26, compared to a loss of ~Rs 55 crore (adjusted) in FY25,” Motilal Oswal said. Return on invested capital is also expected to rise to 8.1% in FY28 from 5.7% in FY25.
Motilal Oswal on JSW Cement: Why GGBS matters for JSW Cement
Unlike most cement companies that depend heavily on grey cement, JSW Cement derives a significant share of profits from GGBS (ground granulated blast furnace slag).
“GGBS contributed ~33–34% to revenues in FY24-25 but accounted for as much as 61–76% of EBITDA,” the brokerage said.
Motilal Oswal on JSW Cement: Key risks to watch
According to Motilal Oswal, the main upside risks include better clinker-to-cement ratios and higher-than-expected utilisation of the North plant.
On the flip side, downside risks include pricing pressure in the South, declining trade volumes, and delays in commissioning new capacity.
Motilal Oswal on JSW Cement: Valuation outlook
At current market levels, JSW Cement is trading at 16x FY27E EV/EBITDA, compared to peers like Ramco Cements (14x) and Dalmia Bharat (11.4x).
“Considering the aggressive expansion plans and earnings stability from GGBS, we value JSW Cement at 15x Sep’27E EV/EBITDA to arrive at our target price of Rs 163,” Motilal Oswal said, reiterating its Neutral stance.