Global brokerage Jefferies has initiated coverage on JSW Cement with a “Buy” rating and a target price of INR 170 per share, signaling an upside potential of 22–23% from current levels. The initiation note comes as a vote of confidence in the newly listed cement major’s expansion plans, operational efficiency, and strong positioning within India’s fast-evolving cement sector.
A Bullish Call on a Newly Listed Player
Shares of JSW Cement, which debuted on the bourses in August 2025, have traded below their IPO price of INR 147 per share in recent weeks. On Monday, the stock rose up to 3% to INR 142.70, reacting positively to Jefferies’ coverage initiation.
Jefferies’ target price of INR 170 implies substantial re-rating potential as the company scales up capacity and improves margins. This target also exceeds the broader analyst consensus, which currently projects an upside of about 13–14%.
The brokerage note highlights that JSW Cement has transitioned from being a regional player to one of the top 10 cement companies in India, driven by its capacity and volume CAGR of 13–17% over FY2015–2025.
Robust Growth Forecasts: 35% EBITDA CAGR Expected
Jefferies projects a 35% compounded annual growth rate (CAGR) in EBITDA between FY2025 and FY2028, underpinned by rising volumes, margin expansion, and geographical diversification.
The firm estimates:
- Volume CAGR: 17% over FY25–FY28
- Unit EBITDA: Rising from INR 685 per tonne in FY25 to INR 1,050 per tonne by FY28
- Leverage Improvement: Net debt/EBITDA expected to decline from ~5x in FY25 to 2.7–3x by FY28
These metrics, combined with the company’s strategic expansion into North India, are expected to drive earnings and justify valuation multiples closer to larger peers. Jefferies has valued JSW Cement at 15x Sep-27 EBITDA, leading to the INR 170 target.
Strategic Capital Allocation from IPO Proceeds
JSW Cement raised INR 3,600 crore through its IPO in August 2025, comprising:
- INR 1,600 crore fresh issue, and
- INR 2,000 crore offer for sale (OFS)
The fresh issue proceeds are earmarked for:
- Setting up a new integrated cement unit in Nagaur, Rajasthan (INR 800 crore)
- Debt repayment (INR 520 crore), and
- General corporate purposes
These investments are expected to enhance capacity and reduce leverage, strengthening the balance sheet.
Sustainability and GGBS Leadership
JSW Cement has carved a strong niche in the Ground Granulated Blast Furnace Slag (GGBS) segment—a low-carbon, high-performance cement substitute derived from steel manufacturing by-products.
With a commanding 83–84% market share in India’s GGBS market, the company benefits from a steady slag supply via its parent, the JSW Group. Despite GGBS being priced 20–25% lower than traditional cement, it contributes disproportionately to profits, delivering EBITDA per tonne of INR 1,300–1,500 and accounting for over 80% of total EBITDA in FY25.
This green product focus aligns with India’s growing emphasis on sustainable infrastructure and offers JSW Cement a competitive edge in cost efficiency and environmental responsibility.
Sector Context: Jefferies Turns Bullish on Cement
Jefferies’ upbeat stance on JSW Cement also comes amid a broader positive outlook on India’s cement sector.
In a sectoral note dated 8 October, the brokerage forecasted a 52% year-on-year EBITDA growth for its cement coverage universe in Q2FY26, driven by resilient pricing and easing input costs. While UltraTech Cement, Ambuja Cements, and JK Cement remain Jefferies’ top picks, it also highlighted JSW Cement and JK Lakshmi Cement among mid-cap names likely to deliver 50–55% YoY earnings growth.
Jefferies expects cement prices to remain firm despite seasonal monsoon weakness and foresees potential price hikes in the coming months as fuel costs rise. Demand recovery, disciplined pricing, and government-led infrastructure push are seen as key catalysts for sector-wide profitability.
Bottom Line
Jefferies’ initiation of coverage on JSW Cement underscores growing institutional confidence in India’s next wave of cement growth stories. Backed by robust earnings visibility, balance sheet improvement, and leadership in sustainable cement products, JSW Cement appears well-positioned for a rerating as it transitions to a pan-India player.
With the stock still trading below its IPO price and industry tailwinds in place, Jefferies’ bullish call signals that JSW Cement could soon cement its place among India’s most promising mid-cap industrial plays.
Key Highlights at a Glance:
- Rating: Buy
- Target Price: INR 170
- Upside Potential: ~23%
- EBITDA CAGR (FY25–28): 35%
- Volume CAGR (FY25–28): 17%
- Net Debt/EBITDA: Improving from 5x → 2.7–3x
- IPO Funds Usage: Capex in Rajasthan, debt repayment, and corporate purposes
- Market Position: Top 10 cement producer, leader in GGBS segment
For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.