Cement Sector Update: JSW Cement 3QFY26 beats estimates on volumes By Motilal OswalFinancial Services Ltd
Beat estimates; EBITDA/t at INR801 (est. INR719)
* JSW Cement’s (JSWC) 3QFY26 performance was above our estimates, driven by higher-than-estimated volume/realization and lower-thanestimated opex/t. EBITDA increased ~33% YoY to INR2.9b (~16% above our estimates). OPM expanded 2.7pp YoY to ~18% (est. ~16%). EBITDA/t increased ~17% YoY to INR801 (est. INR719). Adj. PAT stood at INR1.3b vs. loss of INR199 in 3QFY25 (beat our est. of INR380, led by lower interest cost and higher other income).
* The company is setting up a cement GU of 1.65mtpa in Fujairah, UAE, at a capex of USD39m (INR3.5b at USD?=?INR90.5). Work on the greenfield expansion in Nagaur, Rajasthan, is nearing completion, with commissioning expected in 4QFY26. Additionally, it commissioned 4.8MW and 3.0MW solar plants at its Nandyal and Vijayanagar plants, respectively, during 3QFY26
Sales volume up 14% YoY; blended realization/t down 1% YoY
* Consolidated revenue/EBITDA/stood at INR16.2b/INR2.9b (up 13%/ 33% YoY and up ~6%/16% vs. estimates). Net profit stood at INR1.3b (3.4x above estimates) vs. a loss of INR199m in 3QFY25. Sales volume increased 14% YoY to 3.6mt (+5% vs. our estimates). Of this, cement volume stood at 1.9mt (up 7% YoY) and GGBS was at 1.5mt (17% YoY). Blended realization/t was down 1% YoY/QoQ at INR4,554/t (in line).
* Opex/t declined 4% YoY (~1% below estimate), led by a ~8%/7%/5% YoY decline in other expenses/staff cost/freight cost per ton. Variable cost/t declined ~1% YoY. EBITDA/t increased ~17% YoY to INR801.
* In 9MFY26, revenue/EBITDA stood at INR46.2b/INR8.8b (up ~13%/44% YoY). Adj. PAT stood at INR3.3b vs. net loss of INR475m in 9MFY25. Realization/t remained flat YoY to INR4,627. EBITDA/t grew ~28% YoY to INR877.
Highlights from the management commentary
* Variable cost increased marginally due to product mix shifts, higher blended fuel consumption, and increased inter-plant expenses. Fuel consumption cost stood at INR1.49/kcal vs. INR1.42/INR1.5 in 3QFY25/2QFY26. Lead distance declined to 273km from 281km in 3QFY25.
* Green power share increased to ~25% in 3QFY26 vs. ~21% in 2QFY26.
* Net debt increased to INR35.6b vs. INR32.3b as of Sept’25. Net/debt to EBITDA (TTM) ratio stood at 2.9x vs. 2.8x as of Sept’25.
Valuation and view
* JSWC delivered a strong earnings beat, supported by robust volume growth and lower costs. However, net debt rose sharply on a QoQ basis. During the conference call, we will seek management’s guidance on the sustainability of its profitability. We have a Neutral rating on the stock.
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