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    JSW Cement Q1 FY26 earnings call

    JSWCEMENTGood
    Construction Materials·3 Sept 2025
    Management Summary

    JSW Cement delivered a record-breaking Q1 FY26, significantly outperforming the broader industry in volume growth and margin expansion. The company is aggressively pursuing a cost-reduction target of ₹400/ton, with half already achieved through logistics and energy efficiencies. Management is focused on a massive capacity expansion to 41.85 MTPA by 2028 while maintaining a sustainable EBITDA/ton target of ₹1,150-1,200.

    Highlights

    8

    • Total sales volume reached 3.31 million tons, up 7.8% YoY, outperforming industry growth of ~3%.

    • Revenue grew 8% YoY to ₹1,560 crores, driven by better realization and volume growth.

    • Operating EBITDA improved 39% YoY to ₹323 crores, marking the company's best-ever Q1 performance.

    • EBITDA per ton stood at ₹974, a substantial increase on both YoY and QoQ bases.

    • Operating EBITDA margin expanded by 460bps YoY to 20.7%.

    • Cement realization for the quarter was ₹4,894 per ton, while GGBS realization remained flat at ₹3,715 per ton.

    • Reported a non-cash fair value expense of ₹1,466 crores related to CCPS; Adjusted PAT stood at ₹100 crores.

    • Net debt ended the quarter at ₹4,566 crores with a Net Debt/EBITDA ratio of 4.32x.

    What Changed3

    vs Q4 FY26

    Guidance items11 → 6 (-5)Risks discussed5 → 3 (-2)Q&A highlights8 → 3 (-5)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹1,560 Cr+8%YoY
    2. 02Operating EBITDA₹323 Cr+39%YoY
    3. 03EBITDA Margin20.7%
    4. 04EBITDA per Ton₹974
    5. 05Adjusted PAT₹100 Cr

    Segment breakdown

    • Cement1.85 Mn58.7%
    • GGBS1.3 Mn41.3%
    Donut· Share of Volume

    Guidance & targets

    6
    CategoryTargetPriority
    Volume
    Annual Sales Volume
    15.5 million tons
    		High
    Profitability
    EBITDA per ton
    1,150 to 1,200
    		Medium
    Capacity
    Grinding Capacity
    41.85 million metric tons
    		High
    Capex
    Annual Capex
    ₹2,000 crores
    		High
    Margin
    Cost Reduction per ton
    ₹400
    		High
    Debt
    Net Debt to EBITDA Ratio
    2x to 2.5x
    		Medium

    Risks & concerns

    4
    RiskSeverity

    Rising Fuel Costs

    Petcoke prices have moved up to $115 CFR for new bookings, though current stocks at $105 will last until mid-January. — Management acknowledged

    medium

    GST Rate Cut Impact on Incentives

    A potential GST cut from 28% to 18% could reduce the absolute value of state-level SGST reimbursement incentives. — Analyst acknowledged

    low

    High Leverage

    Net Debt to EBITDA is currently high at 4.32x, though management plans to use IPO proceeds to repay debt and target 2x-2.5x. — Both acknowledged

    medium

    Areas of Evasion(1)

    • Specific regional pricing or segment-wise EBITDA break-ups were not provided.

    Q&A highlights

    3

    “The CCPS liability will convert into equity in Q2. We would therefore urge the investor community to focus on adjusted PAT, which is nothing but adding back of the fair value adjustment.”

    Clarifies that the massive reported loss is a non-cash accounting entry that will resolve in the next quarter, revealing the true underlying profitability (Adjusted PAT of ₹100 Cr).

    asked by Rajesh Ravi, HDFC Securities

    2 min read5 chapters

    Detailed Narrative

    01

    Operational Excellence and Cost Leadership

    JSW Cement is leveraging its industry-leading clinker-to-cement factor of 51% to drive superior unit economics. The company has embarked on a ₹400 per ton cost reduction program, of which ₹200 has already been realized. Key levers for the remaining ₹200 include a ₹65-70/ton saving from renewable energy and fuel mix improvements, and a ₹45-50/ton saving from optimizing lead distances, which currently stand at 283 km.

    02

    Aggressive Capacity Expansion Roadmap

    The company is on track to reach 41.85 MTPA grinding capacity by 2028. Immediate milestones include the commissioning of the 1 MTPA Sambalpur unit in September 2025 and the Nagaur integrated unit (2.5 MTPA grinding, 3.3 MTPA clinker) within FY26. Total capex is pegged at ₹2,000 crores annually for both FY26 and FY27 to support this growth.

    03

    Strategic Focus on GGBS Penetration

    GGBS volumes grew 5% YoY to 1.3 million tons, representing 39% of the total mix. Management is consciously maintaining stable GGBS pricing to drive adoption among Ready-Mix Concrete (RMC) players and infrastructure projects. While the GGBS mix is expected to moderate📎 to 35% by FY28 as new North-based OPC/PPC capacity comes online, absolute GGBS volumes are projected to continue growing.

    04

    Green Energy Pivot

    Sustainability remains a core pillar, with the company reporting the lowest CO2 intensity in the sector at 277 kg per ton of cementation. To further reduce costs and carbon footprint, JSW is adding 127 MW of renewable energy (92 MW wind, 35 MW solar), bringing total RE capacity to 154 MW. This transition is expected to lower power costs significantly compared to the current grid rates of ₹7-8 per unit.

    05

    Deleveraging and Financial Health

    Despite a high current Net Debt/EBITDA of 4.32x, management is committed to a target range of 2x to 2.5x. Deleveraging will be supported by the repayment of ₹520 crores of debt using IPO proceeds in Q2 FY26 and strong operating cash flows. The average cost of debt currently stands at 8.29%.

    This is an AI-generated summary of a publicly available earnings call transcript.