Cement Stock In Focus: Prism Johnson’s Big Renewable Energy Gamble Revealed

Prism Johnson has approved an investment of up to Rs 40 crore in KUS Renewable Private Limited, a special purpose vehicle developing a 49.5 MW captive wind power project in Madhya Pradesh that is proposed to supply electricity to the company’s cement plant at Satna.

The board approved the transaction at its meeting on September 25, 2026. Prism Johnson will invest cash through normal Banking channels and expects to complete the acquisition by October 31, 2027.

The investment is aimed at reducing the cost of cement production by securing cheaper renewable electricity for the Satna plant. Energy is a significant cost component for cement producers, alongside fuel, freight and raw materials, making captive renewable sourcing relevant to the company’s broader cost-efficiency agenda.

KUS Renewable will develop the wind project at Tehsil Alot in Ratlam district. The project is intended to supply power to Prism Johnson under a proposed power purchase agreement between the two companies.

Prism Johnson will acquire equity shares carrying voting rights of at least 26.5 per cent of KUS Renewable’s equity share capital, along with redeemable preference shares. The company said the investment would increase renewable energy utilisation, improve energy efficiency and support resource optimisation across its operations.

KUS Renewable was incorporated on September 26, 2024, by Purvah Green Power Private Limited, a subsidiary of Calcutta Electric Supply Corporation Limited. The wind power vehicle has not commenced business operations and reported nil turnover in each of the preceding two financial years.

The proposed Rs 40 crore investment is relatively modest against Prism Johnson’s scale, representing about 0.5 per cent of its consolidated revenue from operations of Rs 7,380.62 crore in FY2025-26. However, its strategic importance lies in potentially lowering a recurring manufacturing cost at the company’s core cement operation rather than adding immediate revenue.

Prism Cement generated segment revenue of Rs 3,405.10 crore in FY2025-26 and reported cement and clinker sales of 7.4 million tonnes. The division’s EBITDA rose to Rs 402 crore from the previous year, supported by improved operating conditions, premium product mix and cost management. The captive wind proposal extends this focus on operational efficiency into energy sourcing.

The move also follows an improvement in the company’s first-quarter profitability. For the quarter ended June 2026, Prism Johnson’s net sales declined 4.5 per cent year-on-year to Rs 1,835.23 crore, while PBIDT excluding other income rose 30.9 per cent to Rs 220.51 crore. The margin expanded to 12.02 per cent from 8.76 per cent a year earlier, underscoring the financial relevance of continued input-cost discipline.

The company said the acquisition does not constitute a related-party transaction and that its promoter, promoter group and group companies have no interest in the deal. It also stated that no governmental or regulatory approvals are required for the acquisition.

Execution remains the key consideration because KUS Renewable is yet to begin operations and the power supply arrangement is still proposed. The project’s economic benefit will depend on timely Construction, commissioning and finalisation of the power purchase agreement.

As of 12:32 PM on September 25, 2026, Prism Johnson shares were trading at Rs 115.05, down 0.35 per cent from the previous close. The stock was about 31.8 per cent below its 52-week high of Rs 168.75 and around 9.6 per cent above its 52-week low of Rs 105.00. Over the preceding year, the shares declined 22.36 per cent, compared with a 4.30 per cent fall in the BSE 500.

Disclaimer: The article is for informational purposes only and not investment advice.