JSW Cement Upgrade to Buy with a Target Price of Rs 142: Prabhudas Lilladher

JSW Cement Reports Strong Q4FY26 Performance

JSW Cement (JSWCEMEN) delivered a robust operating performance in Q4FY26, driven by higher cement net sales realisation (NSR) and healthy cement volume growth. The company's total sales volumes grew 5.8% year-over-year (YoY), primarily due to strong cement volume growth of 12% YoY. However, GGBS (Ground Granulated Blast Furnace Slag) volumes were impacted by temporary slag availability issues at the Dolvi unit.

The cement NSR improved 4.8% quarter-over-quarter (QoQ), mainly led by price hikes in East and West regions, as well as a higher trade share. On the cost front, JSW Cement benefited from lower power and fuel costs, reduction in certain raw material costs, and operating leverage benefits. However, these gains were partially offset by higher logistics costs due to increased lead distance (slag) and incremental expenses related to North India operations. As a result, the Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) per tonne (t) came in at INR915, exceeding the previous estimate of INR842.

Outlook and Recommendations

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In light of the strong Q4FY26 performance, JSW Cement's management has highlighted that demand improved in May after a relatively weak April. The company expects cement volume growth in the mid-to-high teens in FY27, excluding North India. Based on this outlook, Prabhudas Lilladher has tweaked its EBITDA estimates by -1/+1% and expects the company to deliver EBITDA/volume compound annual growth rate (CAGR) of 25%/18% over FY26-28E.

The stock is trading at an Enterprise Value (EV) of 13.1x/11.8x FY27/28E EBITDA. Prabhudas Lilladher maintains a 'Accumulate' rating on the stock with a target price of Rs142, valuing the company at the same 13x EV of Mar'28E EBITDA.