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Beat estimates; EBITDA/t at INR860 (est. INR657)

* JSW Cement (JSWC)’s 2QFY26 EBITDA was above our estimates, driven by higher volume and lower opex/t vs. our estimates. EBITDA increased 114% YoY to INR2.7b (~40% beat). EBITDA/t surged ~86% YoY to INR860 (vs. est. INR657). OPM increased 8.4pp YoY to ~19% (vs. est. ~14%). It reported PAT of INR864m (+115% beat) vs. a loss of INR644m in 2QFY25.

* The company has commissioned a 1.0mtpa GU in Sambalpur, Odisha, in Sep’25, for which clinker will be sourced from Shiva Cement (a subsidiary of JSWC). Work at its greenfield expansion in Nagaur, Rajasthan, is progressing as per schedule and is expected to be commissioned in early-4QFY26. In 2QFY26, its cement volume grew ~7% YoY, while GGBS volume increased ~21% YoY. Cement realization declined ~5% QoQ, while GGBS realization dipped ~1% QoQ.

Sales volume up 15% YoY; blended realization/t up 2% YoY

* Consolidated revenue/EBITDA/stood at INR14.4b/INR2.7b (up 17%/114% YoY and up ~7%/40% vs. estimates). Net profit stood at INR864m (115% above estimates) vs. a loss of INR644m in 2QFY25. Sales volume increased 15% YoY to 3.1mt (+7% vs. our estimates). Of this, cement volume stood at 1.7mt (up 7% YoY) and GGBS was at 1.4mt (21% YoY). Blended realization/t was up 2% YoY (down 2% QoQ) at INR4,619/t (in line).

* Opex/t declined 7% YoY (~5% below estimate), led by a ~5%/16%/1% YoY decline in variable cost/other expenses/freight cost per ton. Employee cost per ton declined ~17% YoY. EBITDA/t increased ~86% YoY to INR860.

* In 1HFY26, revenue/EBITDA stood at INR30.0b/INR5.9b (up ~12%/65% YoY). Adj. PAT stood at INR2.0b vs. net loss of INR795m in 1HFY25. EBITDA/t grew ~49% YoY to INR919. OCF stood at INR5.1b vs. INR1.9m in 1HFY25. Capex stood at INR9.6b vs. INR4.8b in 1HFY25. Net cash inflow stood at INR4.6b vs. INR3.0b in 1HFY25.

Highlights from the management commentary

* Variable cost declined due to a change in product mix, decline in slag prices and higher production driving operating efficiency. Fuel consumption cost stood at INR1.5/kcal vs. INR1.52/INR1.55 in 2QFY25/1QFY26. Lead distance declined to 283km from 288km in 2QFY25.

* Green power share stood at ~21%, similar to FY25. It targets to increase it to ~49% by 4QFY26 and ~63% by FY27.

* Net debt declined to INR32.3b vs. INR45.7b as of Jun’25. Net/debt to EBITDA (TTM) ratio stood at 2.8x vs. 4.3x as of Jun’25

Valuation and view

* JSWC reported a strong beat on earnings, driven by robust volume growth and better operating efficiency. Further, the company’s net debt declined sharply on a QoQ basis, aided by improvement in profitability. During the conference call, we will seek management guidance on the sustainability of its profitability. We have a Neutral rating on the stock. However, we will review our assumptions after the conference call on 10th Nov’25 (Concall Link).

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