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BACKGROUND

JSW Cement Limited is a leading, environmentally conscious cement manufacturer in India, focused on producing green cement and sustainable building materials. As part of the JSW Group, the company leverages industrial by-products such as blast furnace slag and fly ash to manufacture eco-friendly products like Portland Slag Cement (PSC), Ground Granulated Blast Furnace Slag (GGBS), and Ready-Mix Concrete (RMC). JSW Cement aims to expand its capacity significantly to meet growing infrastructure and housing demand.

Details of the Issue:

The public issue consists of Offer for Sale aggregating up to Rs 2000 Cr and fresh issue up to Rs 1600 Cr. Net proceeds shall be utilized towards:

* Part financing of a new integrated cement unit at Rajasthan – 800 Cr

* Repayment of borrowings – 520 Cr

* Other general corporate purposes

Investment Rationale:

* Strategic Capacity Doubling Initiative Targeted for Completion by FY26

* Dominant Market Leadership in GGBS Segment

* Strategic Synergies with the JSW Group

Valuation and Recommendation:

JSW Cement’s revenue (excluding FZC) grew from Rs.4,865.8 crore in FY23 to Rs.5,813 crore in FY25, led by a 9.71% CAGR in volumes. Over 77% of FY25 sales came from green products like GGBS and PSC. With grinding capacity set to expand to 41.85 MTPA, the company is well-placed for growth and margin improvement post-FY26. Company is valued at 30.1x FY25 EV/EBITDA which is above its peers but considering its scale, growth prospects, and group synergies, we recommend a Subscribe rating from long-term perspective.

Industry Overview and Company Background

The global cement industry produced approximately 4.0 bnT in 2024, with India emerging as the second-largest producer after China, contributing 11.25% of global output and registering the highest CAGR of 5.04% among major producing nations from 2018 to 2024. In India, cement production reached around 467 MMT in FY25, and demand is expected to grow at a 7.5%–8.5% CAGR, reaching 670–680 MMT by FY30, driven by strong growth across infrastructure, housing, industrial, and RMC sectors. Additionally, demand for green cementitious products like GGBS is projected to grow at a 14%–15% CAGR, positioning companies like JSW Cement to capitalize on sustainability-led opportunities.

JSW Cement Limited is among the top three fastest-growing cement manufacturers in India in terms of installed grinding capacity and sales volume growth between FY2015 and FY2025, and ranks among the top ten cement companies in the country by capacity and sales volume as of March 31, 2025, according to CRISIL. As of March 2025, JSW Cement operates with 20.60 MMTPA of installed grinding capacity and 6.44 MMTPA of clinker capacity across strategically located plants in southern, western, and eastern India, with plans to expand to 41.85 MMTPA and 13.04 MMTPA respectively, through greenfield and brownfield projects. The company is recognized as India’s largest producer of ground granulated blast furnace slag (GGBS) with an 84% market share and maintains one of the lowest clinker-to-cement ratios in the industry, underlining its commitment to sustainable manufacturing.

Since beginning operations in 2009 with a single grinding unit in Karnataka, JSW Cement has developed an extensive portfolio including blended cement (PSC, PCC, PPC), OPC, GGBS, ready-mix concrete (RMC), screened slag, and other allied products. It operates seven manufacturing plants in India and one clinker unit in the UAE, ensuring a robust supply chain and product availability across major consumption regions. The company holds rights to mine limestone across 11 mines in India and one in the UAE, ensuring long-term security of raw material supply.

The company is an industry leader in environmental performance, reporting the lowest carbon dioxide emission intensity among its Indian and global peers, driven by its circular economy approach that emphasizes the use of industrial by-products like slag, fly ash, red mud, and alternate fuels. JSW Cement distributes its products through a strong network of over 4,600 dealers, 8,800 sub-dealers, and 6,500 institutional customers. As a part of the diversified JSW Group, it benefits from operational synergies, access to captive raw materials and power, and the strength of the JSW brand. JSW Cement is well-positioned to capitalize on India’s infrastructure growth while maintaining its sustainability leadership.

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