JSW Cement FY26: EBITDA surge, a North India entry, and a capex-heavy road ahead

JSW Cement closed FY26 with faster profit growth than revenue, even as the quarter carried transition costs tied to its North India entry. Consolidated revenue from operations rose to INR6,512.5 crore in FY26, up 12.0 percent year on year, while operating EBITDA increased 43.6 percent to INR1,240.3 crore. The operating EBITDA per ton improved to INR888 from INR684 in FY25, supported by operating leverage and cost discipline.

In Q4 FY26, revenue from operations was INR1,895.0 crore, up 10.9 percent year on year. Operating EBITDA rose 45.9 percent to INR365.0 crore, with operating EBITDA per ton at INR916. Management also highlighted an adjusted operating EBITDA of INR378.4 crore (INR950 per ton) excluding INR13.4 crore of forex losses on long-term borrowings caused by rupee depreciation.

The results came in a year marked by two milestones. First, the company’s listing on NSE and BSE in August 2025. Second, the commissioning of the Nagaur integrated unit in March 2026, which management positioned as the launch pad into Rajasthan and Haryana.

FY26 operational momentum and product mix

Total volume sold in FY26 increased to 13.96 million tons, up 10.6 percent year on year. Cement volumes rose 9.0 percent to 7.73 million tons, and GGBS volumes rose 11.6 percent to 5.78 million tons. Management reiterated that GGBS remains a strategic differentiator, with FY26 volumes implying a 41 percent share of total sales volume, and the presentation highlighting JSW Cement as India’s largest manufacturer of GGBS.

In Q4 FY26, total volume sold rose 6.8 percent year on year to 3.99 million tons. Cement volume growth was stronger at 11.6 percent year on year to 2.35 million tons, while GGBS volumes rose 5.4 percent to 1.57 million tons. Management attributed the slower GGBS growth in Q4 to temporary slag availability issues at Dolvi and to dispatch realignment from Vijayanagar, along with temporary closures of some RMC sites in the West due to pollution concerns.

Realisation trends were supportive in cement. Cement realisation in Q4 FY26 improved 4.8 percent quarter on quarter to INR4,673 per ton, while GGBS realisation remained stable at INR3,682 per ton. The trade ratio in cement improved to 51 percent in Q4, and the clinker factor remained at 51 percent.

Financial summary

Note: Total volume sold includes cement, GGBS and clinker; excludes clinker sold from JSW FZC. Operating EBITDA margin is presented in the investor deck for Q4; FY margins are derived from the income statement values in the presentation.

Costs, logistics and the benefit of operating leverage

JSW Cement’s Q4 margin expansion was broad-based, aided by volume growth and improved cement prices. Input costs were stable on a year on year basis. Raw material plus power and fuel costs were INR1,846 per ton in Q4 FY26, broadly flat year on year. The company noted that higher raw material cost in the RMC business and inter-plant transfer impacts were offset by reductions in certain raw material and power costs.

Logistics moved in the opposite direction. Logistics cost per ton rose 3.6 percent year on year and 5.8 percent quarter on quarter to INR1,115 per ton in Q4 FY26. The company linked this primarily to a higher lead distance, which increased to 289 km in Q4 FY26 from 273 km in Q3 FY26, driven mainly by GGBS dispatch realignment.

Employee and other expenses also contained specific one-offs tied to the North entry. The company disclosed incremental expenditure of about INR23 crore in Q4 FY26 for North operations across employee and other expenses, covering manpower and marketing (including TV, print and hoardings). Management clarified these were expensed and not capitalised, stating that branding spend cannot be capitalised under their accounting policies.

Nagaur and the evolving capacity blueprint

The commissioning of the Nagaur integrated unit is the centrepiece of the FY26 strategic narrative. The plant includes 3.3 MTPA clinker capacity and 2.5 MTPA grinding capacity, and management said it started commercial operations in March 2026. The investor deck added operational milestones, including kiln light up in February and first cement dispatch in March.

The company is also accelerating grinding capacity at Nagaur. Management said the additional 1.0 MTPA grinding unit and the waste heat recovery system are expected to be commissioned in the next few months, and indicated that Nagaur would reach 3.5 MTPA grinding capacity soon.

In a significant re-prioritisation, the board approved an additional 2.5 MTPA grinding capacity at Nagaur at a capex of INR430 crore, expected to be commissioned by Q4 FY28. Management explained that delays in receiving environmental clearance for the Mansa, Punjab grinding project could have led to suboptimal utilisation of the Nagaur kiln, and that adding grinding capacity at Nagaur is a more prudent way to ensure clinker utilisation.

Capex guidance was clearly quantified. Management guided to capex of about INR2,300 crore in FY27 and INR2,200 crore in FY28. For Nagaur, management stated that about INR2,400 crore has already been spent, against a total of about INR3,500 crore including the earlier 1.0 MTPA additional grinding.

The company’s longer-term plan remains to reach around 46.0 MTPA grinding capacity and 13.04 MTPA clinker capacity, as highlighted in the investor presentation.

Balance sheet, accounting items, and what to normalise

Net debt stood at INR3,635 crore as of March 31, 2026, versus INR4,204 crore in Q4 FY25. Net debt to equity improved to 0.56x and net debt to TTM EBITDA improved to 2.72x.

On profits, investors need to separate recurring performance from non-recurring and non-cash effects. Q4 FY26 PAT of INR361.7 crore included a one-time benefit of INR211.2 crore from reduction in net deferred tax liabilities, linked to the company’s decision to adopt the new tax regime from FY27. For FY26, the company reported that conversion of CCPS resulted in a non-cash fair value expense of INR1,466.4 crore in Q1 FY26. The investor presentation explained the CCPS accounting treatment (classified as a financial liability measured at fair value through profit or loss) and provided simplified journal entries for the fair value adjustment and conversion.

Management therefore emphasised adjusted PAT. Adjusted PAT for FY26 was stated as INR667.6 crore, defined as PAT plus the fair value expense on financial instruments designated as FVTPL.

Sustainability positioning remains central

JSW Cement continues to position its ESG profile as a competitive advantage. The presentation highlighted CO2 emission intensity of 268 kg per ton for FY26, described as the lowest in the Indian cement industry. The company also reported 77 percent of total volume sold as green cementitious products and a clinker to cement ratio of 51 percent.

The clean energy portfolio (renewable energy plus WHRS as a percentage) improved to 24.0 percent in FY26 from 21.5 percent in FY25. Thermal substitution rate was 13 percent for FY26, with the Nandyal chlorine bypass system intended to increase the thermal substitution rate to around 25 percent by end FY27.

What management is watching for FY27

The management tone in the concall was cautious on near-term demand. They pointed to inflationary pressures linked to the West Asia conflict, higher fuel and packaging costs, and soft demand in April 2026 due to labour shortages and elections in key states. Still, they maintained their stance on growth, reiterating mid-teens to high-teens performance guidance (excluding the North) and guiding to 50 to 60 percent utilisation for the Nagaur 2.5 MTPA grinding capacity for the year.

They also reiterated that GGBS volumes should be around the same range as earlier guidance, despite Q4 disruptions.

Closing takeaways

FY26 showed that JSW Cement’s operating model can deliver meaningful margin expansion when volumes and pricing improve, with EBITDA growth far outpacing revenue growth. At the same time, the quarter also revealed the cost and complexity of entering a new region, with North-related spends hitting the P&L before meaningful revenues from Nagaur.

The next phase is capex-heavy and execution-driven. Management’s decision to add incremental grinding capacity at Nagaur to offset Punjab approval delays is a clear example of re-prioritising projects based on ground realities. For investors, FY27 will likely hinge on three measurable markers: the ramp-up of Nagaur utilisation, stabilisation of logistics and dispatch efficiency, and delivery on the stated capex and commissioning timelines, including the UAE grinding unit expected by end April 2027.