JSW Cement Shares Rise 2% Following Motilal Oswal Upgrade to Buy

JSW Cement shares advanced by nearly 2 percent on Monday after Motilal Oswal Financial Services raised its rating on the stock from Neutral to Buy. The brokerage firm maintained a target price of Rs 146 per share, signaling confidence in the cement company's future prospects.

During the trading session, JSW Cement's shares reached an intraday high of Rs 119.75 on the Bombay Stock Exchange. The upgrade by Motilal Oswal was based on several positive factors, including robust volume growth, strategic expansion into North India, improved cost efficiency, and a favorable medium-term outlook.

Motilal Oswal's latest research report highlighted that JSW Cement is well-positioned for sustained growth over the coming years. The company's entry into the North Indian market and the stabilization of its plant there are expected to play a crucial role in driving volume increases and operational efficiencies. Additionally, the company’s efforts to optimize costs through alternative fuels and raw materials, renewable energy integration, and logistics improvements are anticipated to support margin expansion.

The brokerage emphasized the importance of the North India plant's ramp-up, describing it as a key factor that could accelerate growth and prompt a re-rating of the stock by investors. This expansion aligns with JSW Cement’s broader strategy of becoming a more geographically balanced and integrated cement producer, moving beyond its traditional stronghold in South India.

In terms of volume, the industry witnessed a 10 to 12 percent year-on-year increase during July and August of 2026. JSW Cement’s volume growth on a like-for-like basis was roughly consistent with this trend. However, when factoring in the output from the new North India facility, the company’s overall volume growth surged to an estimated 23 to 25 percent year-on-year for the same period. The brokerage expects this positive momentum to continue into September, supported by a favorable comparison base.

From a cost perspective, Motilal Oswal anticipates that fuel expenses will remain largely stable or see only a modest increase in the second quarter of fiscal year 2027. This outlook is supported by JSW Cement’s low-cost fuel inventory and its approximately 40 percent GGBS (Ground Granulated Blast Furnace Slag) mix, which reduces exposure to fluctuations in fuel prices. Furthermore, as operations such as Old Lignite-Based Captive (OLBC) power, Alternative Fuels and Raw Materials (AFR), and Waste Heat Recovery Systems (WHRS) at the North India plant become fully functional, variable costs per tonne are expected to decline over the next six months.

Motilal Oswal projects strong financial growth for JSW Cement, with revenue, earnings before interest, taxes, depreciation and amortization (EBITDA), and profit after tax (PAT) expected to increase at compound annual growth rates of approximately 20 percent, 20 percent, and 15 percent respectively between fiscal years 2026 and 2028.

This projected growth is partly due to the company’s transition from a business primarily centered on South India and GGBS to a more diversified and geographically balanced cement producer. At the current market price, JSW Cement trades at around 12 times its enterprise value to EBITDA ratio for fiscal year 2028, compared to 14 times at its listing price. Based on this valuation multiple, Motilal Oswal has set a target price of Rs 146 per share and upgraded the rating to Buy.

JSW Cement is part of the larger JSW Group, which has significant presence across multiple sectors in India, including steel, energy, and infrastructure. The cement industry in India is witnessing steady demand growth driven by infrastructure development and urbanization, making companies with strategic expansions and cost advantages attractive to investors.

The brokerage’s upgrade reflects confidence in JSW Cement’s ability to capitalize on these trends, particularly through its North India expansion and ongoing efficiency improvements. Investors should consider this alongside their own analysis and the original research reports when making investment decisions.

Disclaimer: This article was written by Ritesh Presswala, who is not a SEBI-registered Research Analyst or Investment Adviser. Neither Ritesh Presswala nor his relatives hold any financial interest in JSW Cement as of the publication date. The opinions expressed are based on brokerage research and do not represent the views of The Economic Times Digital or its journalists. Readers are advised to conduct their own due diligence before investing.