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Investing.com - Goldman Sachs initiated coverage on JSW Cement Ltd (JSWCEMEN:IN) with a Neutral rating and a price target of INR147.00, implying approximately 3% potential downside.
The investment bank noted that JSW Cement currently operates with 20.6 million tons of grinding capacity and is targeting an expansion to 42 million tons over the next five years, positioning it as one of India’s fastest-growing cement companies.
Goldman Sachs identified several key factors that will determine any potential re-rating of the stock, including JSW Cement’s ability to successfully execute its capacity expansion plans, improve profitability measured by EBITDA per ton, and effectively manage leverage.
The analyst report highlighted competitive challenges in the industry, noting that large players such as Ultratech (185 million tons) and Ambuja (104 million tons) maintain debt-free balance sheets that enable them to potentially consolidate market share.
Goldman Sachs applied a fiscal year 2027 estimated EV/EBITDA multiple of 14X for JSW Cement, lower than the 16-18.5X multiples assigned to larger peers, while smaller peers with low growth are valued between 7.5-11X.
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