JSW Cement Nagaur ramp-up supports volumes despite Q1 margin pressure

Investment View and Valuation

Prabhudas Lilladher’s August 15, 2026 Q1 FY27 result update retains an Accumulate rating on JSW Cement and revises the target price to Rs 139 from Rs 141. The target price values the stock at an unchanged 13 times March 2028E EBITDA. JSW Cement was trading at 13.7 times FY27E and 12.2 times FY28E EV/EBITDA.

The broker’s thesis is supported by the ramp-up of the newly commissioned Nagaur plant, expected cost improvement in North India, capacity expansion, RMC scale-up and the planned entry into Central India. Elevated capex-led debt and the pace of margin recovery at Nagaur remain key monitorables.

Q1 FY27 Financial Performance

JSW Cement reported consolidated Q1 FY27 revenue of Rs 18.96bn, up 22 per cent year-on-year and broadly flat quarter-on-quarter. Revenue was marginally above Prabhudas Lilladher’s estimate of Rs 18.84bn. Total sales volume increased 15 per cent year-on-year to 3.81mt, broadly in line with the broker’s 3.82mt expectation.

Cement volume growth was supported by the Nagaur plant ramp-up, while GGBS volume growth remained limited as RMC disruption in tier-1 cities in the Western region continued until mid-May. Blended net sales realisation increased to Rs 4,977 per tonne, above the broker estimate. Cement NSR was Rs 4,951 per tonne and GGBS NSR was Rs 3,807 per tonne.

Trade contribution remained at 51 per cent, while the blended-product share declined to 63 per cent from 65 per cent in Q4 FY26.

Margin Performance and Cost Pressures

Q1 FY27 EBITDA was 13 per cent below the broker estimate, and EBITDA per tonne declined to Rs 784. Ex-Nagaur EBITDA per tonne was Rs 979, indicating the initial earnings drag from the new plant.

Higher power and fuel, packaging, raw-material and other costs, along with North India marketing expenditure, offset the benefit of stronger realisations.

Lead distance reduced to 285km from 289km in Q4 FY26, contributing to the decline in freight cost per tonne.

Nagaur Ramp-up and Operating Outlook

Management indicated that Nagaur utilisation improved from 55 per cent in Q1 FY27 to 68 per cent in June. The company targets more than 60 per cent utilisation for FY27 on expanded 3.5mtpa capacity.

• A further 1mtpa Nagaur capacity addition is due by September 2026.
• An additional 2.5mtpa capacity is planned by March 2028.
• North India operations are expected to achieve EBITDA breakeven from Q2 FY27 through the commissioning of WHRS, AFR and OLBC, greater use of domestic fuel and lignite, and logistics efficiencies.
• Management expects high-teens volume growth in FY27.
• GGBS volume is targeted at approximately 6.5mt to 7mt.
• The renewable-energy share is targeted to increase to 63 per cent from 30 per cent.

Estimates and Key Monitorables

Prabhudas Lilladher changed its FY27E and FY28E sales estimates by minus 1.4 per cent and minus 3.8 per cent, respectively. EBITDA estimates were changed by plus 2.7 per cent for FY27E and minus 1.5 per cent for FY28E.

The broker expects FY26–28E EBITDA and volume CAGR of 24 per cent and 17 per cent, respectively. The key monitorables remain elevated capex-led debt and the pace of margin recovery at Nagaur.