JSW Cement Ltd

Show Cause Notice

• Show Cause Notice from Additional Commissioner, Central Tax (Audit), Guntur, issued 20 Aug 2026.
• Allegations include irregular post-sale discount reductions and incorrect tax classifications.
• Proposed GST demand totals Rs 81,03,42,387 plus interest and penalties.
• No material impact on JSW Cement; company is filing a reply.

Financial Performance

• Consolidated revenue: INR 1,896 crores in Q1 FY27; up 22% YoY; flat QoQ.
• Consolidated operating EBITDA: INR 299 crores for the quarter.
• EBITDA per ton: INR 784.
• PAT: INR 153 crores; PBT: INR 190 crores.
• Excluding North, revenue up ~10% in Q1 FY27; EBITDA up 4% to INR 336 crores; INR 979/ton.
• Total EBITDA including other income: INR 372 crores.
• Raw material and fuel cost per Mcal: INR 1.80; prior quarter INR 1.49.
• Logistics cost per ton down 2% QoQ; lead time down 4 km.
• Wind capacity added: 56 MW; RE share: 30% in Q1.
• GGBS volume growth: 2.6% YoY.
• Cement realization: INR 4,951/ton in Q1 FY27; up 6% QoQ.
• GGBS realization: INR 3,807/ton in Q1 FY27; up 3.4% QoQ.
• Clinker to cement factor: 55% with North operations; lead distance stable.
• Nagaur unit: WHRS, OLBC, AFR to commission in next few weeks; 1 mt grinding cap. by end of Q2.
• North utilization: 55% on average in Q1; June '26 utilization ~68%.
• RE share: 30% in Q1; 56 MW wind capacity added at Dolvi and Vijayanagar.

Operating Update

• Total cement volumes: 3.81 million tons; cement volumes 2.34 million tons, up 27% YoY.
• Ex-North volumes up 8% YoY; North utilization 55% on average.
• GGBS volume growth: 2.6% YoY; monsoon impacts seen in Q2 guidance.
• Cement realization: INR 4,951/ton; GGBS realization: INR 3,807/ton.
• RMC revenues: INR 180 crores in Q1; RMC capacity 15 units, 35 planned.
• Punctual capex push: Q1 capex INR 337 crores; full-year guidance INR 2,300 crores.
• RMC expansion linked to cement footprint; captive vs commercial margins vary.

Projects and Capex

• Nagaur: WHRS, OLBC, AFR to commission in coming weeks; 1 million ton grinding capacity by end of Q2.
• Capex guidance: INR 2,300 crores for FY27; total capex to reach 43.5 MTPA with about INR 7,500 crores.
• Current capacity 24.1 MTPA; target 43.5 MTPA over next few years.
• Fujairah expansion: groundbreaking done; ~12 months to run; Dolvi expansion: ~15 months from start.
• Punjab land: ~INR 50–60 crores; EC approvals awaited.

Outlook and Guidance

• FY27 cement volume growth: high teens total including North.
• GGBS growth: high single digits in FY27.
• Net debt to EBITDA target: below 3.0x.
• Capex plan: FY27 capex INR 2,300 crores; long-term capex to reach 43.5 MTPA.
• North break-even EBITDA expected by Q2 FY27; 60%+ utilization by year-end.

Q&A Highlights

• North profitability: North breakeven EBITDA targeted by September; marketing spend not one-off; full-year profitability guidance under review.
• GGBS guidance: Q1 drag due to West RMC closures and South supply constraints; Q2 expected to improve; pricing unchanged.
• RMC expansion: 15 existing units; 35 more; target INR 1,000 crores revenue including captive.
• Capex discipline: Q1 INR 337 crores; full-year INR 2,300 crores; central region capex up 24% YoY.
• Punjab expansion: EC timelines, land acquired; capex includes Punjab; next steps to be announced.

Risks and Watchpoints

• Macro volatility: West Asia crisis and state elections may affect demand.
• Labor mobility and monsoon impact on Q1 volumes across regions.
• Execution risk: large capex programs; EC approvals for Punjab; project sequencing.

GST show cause update

• Show Cause cum Demand Notice issued by Joint Commissioner, Central Tax (Audit), Kolkata on 18 August 2026.
• Related to alleged: blocked/ineligible ITC, excess ITC, RCM, and short GST payments FY 2020-21 to 2023-24.
• Total demanded amount Rs 10,26,58,291, including IGST, CGST, SGST.
• Company expects no material financial impact; reply being filed.
• Annexure A attached; information uploaded on company website.

Meeting Details

• Date and time: 14 August 2026 at 10:00 a.m. IST.
• Type and mode: results conference call, audio recording.

Participants

• Organizer: JSW Cement Management.
• Key company participants: management representatives.

Purpose

• Purpose: discuss audited Standalone and Consolidated financial results for quarter and year ended 30 June 2026.

Additional Notes

• Audio recording of the conference call has been uploaded on the company's website.

Business overview

• Cement producer with 24.10 MTPA grinding and 9.74 MTPA clinker capacity across regions.
• Growth pipeline includes Nagaur integrated unit and multiple capacity expansions.

Operational highlights

• Nagaur integrated unit: 3.3 MTPA clinker, 2.5 MTPA cement grinding.
• OLBC works in advanced stage; AFR co-processing system to be commissioned Aug-2026.
• Dolvi unit: 1.0 MTPA cement grinding; commissioning Sep-2026; WHRS synchronization.
• Wind capacity added 56 MW in Q1 FY27; total renewable capacity 112 MW.
• Total volume sold 3.81 MT; cement 2.34 MT; GGBS 1.33 MT.

Financial performance

• Revenue from operations ₹1,896.4 crore; up 21.6% YoY.
• Operating EBITDA ₹298.6 crore; total EBITDA ₹372.3 crore.
• PAT ₹153.4 crore; Adjusted PAT ₹153.4 crore.
• Net debt ₹3,856 crore; Net debt/EBITDA 2.95x; cash ₹357 crore.
• Cement realization up 6.0% QoQ; GGBS up 3.4% QoQ; blended cement ratio 63%.
• Credit rating upgrade to IND AA- (Stable) by India Ratings.

Capital structure & liquidity

• Long-term credit rating upgraded to IND AA- (Stable).
• Net debt to equity 0.57x; net debt to EBITDA 2.95x; cash ₹357 crore.

Strategic priorities & outlook

• Future expansion: 68.3 MTPA grinding and 29.5 MTPA clinker capacity.
• Nagaur integrated unit and other projects underpin mid-term capacity growth.
• Renewable energy to support costs; green power share ~30% of energy mix.

Risks & mitigation

• Power and fuel costs rose; raw material cost volatility; Nagaur operation costs.
• EBITDA pressure offset by higher realisation and increased green power.

Governance & leadership

• No material governance changes disclosed in the quarter.

Key Q1 FY27 highlights

• Total volume sold rose to 3.81 million tonnes in Q1 FY27, up 15% YoY.
• Cement volume sold rose 27% YoY to 2.34 million tonnes.
• GGBS volume sold was 1.33 million tonnes, up 3% YoY.
• Revenue for Q1 FY27 was ₹1,896 crore, up 22% YoY.
• Operating EBITDA was ₹298.6 crore; EBITDA per ton ₹784 in Q1 FY27.
• PAT after tax was ₹153.4 crore in Q1 FY27.
• Net debt was ₹3,856 crore as at 30 June 2026.
• Operating EBITDA per ton (Consolidated) was ₹784 in Q1 FY27.
• Operating EBITDA per ton (ex North) was ₹979 in Q1 FY27.
• Total EBITDA including other income was ₹372.3 crore in Q1 FY27.
• Capex incurred in Q1 FY27 amounted to ₹337 crore.
• Nagaur integrated unit commenced sales in April 2026; utilization was 55% in Q1.
• Wind capacity added 56 MW; total renewable capacity including WHRS now 112 MW.
• Nagaur grinding expansion adds 2.5 MTPA to reach 6.0 MTPA total.
• CO2 emission intensity was 338 kg per tonne of cementitious materials in Q1 FY27.
• Awards: Odisha Best Employer Brand and Best Innovation (EHS) at World HRD Congress.
• Vijayanagar plant received Gold Award at Green Enviro Environment Award & Summit.
• Global ESG Award 2026 (Diamond) in Circular Economy category.

Board & result highlights

• Board approved unaudited standalone and consolidated results for quarter ended 30 June 2026.
• Raising of funds up to ₹500 crore via private placement NCDs authorised; Finance Committee empowered.
• Group operates in a single cement segment; no separate segment disclosure.

Consolidated financials

• Revenue from operations: ₹1,896.41 crore for quarter ended 30 Jun 2026.
• Total income: ₹1,970.19 crore.
• Total expenses: ₹1,792.75 crore.
• Profit before tax: ₹190.16 crore.
• Tax expense: ₹36.73 crore; PAT: ₹153.43 crore.
• Total comprehensive income: ₹182.66 crore.

Standalone financials

• Revenue from operations: ₹1,737.89 crore for quarter ended 30 Jun 2026.
• Total income: ₹1,779.02 crore.
• Total expenses: ₹1,631.77 crore.
• Profit before tax: ₹147.25 crore; Tax: ₹35.84 crore; PAT: ₹111.41 crore.
• Basic EPS: ₹0.83; Diluted EPS: ₹0.82.

Notes on segment & review

• Group operates in a single cement-related segment; no segment disclosure required.
• Results reviewed by Deloitte Haskins & Sells LLP; limited review performed.

Issue overview

• IPO of Equity Shares; no deviation from offer document reported.
• Total issue size and net proceeds disclosed; no undersubscription noted.
• Main use objectives: capex, debt repayment, working capital, general corporate purposes.

Utilisation of proceeds

• Utilisation is as per offer document; no material deviations observed.
• GCP delayed due to vendor invoices; board-approved allocations.
• Unutilised funds parked in fixed deposits and monitoring accounts.
• Nagaur project: civil work progressed; remaining funds to be utilised.
• Prepayment of borrowings: fully utilised.
• Issue expenses: allocated to IPO costs.

Governance and compliance

• Board approved GCP allocation; no shareholder deviations required.
• Shareholder approvals: not applicable.
• No material events affecting viability reported; no regulatory actions.
• All major approvals evidenced via management undertakings and audits; no pending items.

GCP

• GCP: 182.61 million used for growth opportunities; board approval obtained; land, plant, civil works.

IPO participation

• Board approved JSW Cement's participation as promoter selling shareholder in JOPL IPO up to Rs 123 crore.
• Sale shares subject to regulatory approvals, market conditions, and other applicable requirements.
• IPO price and other details to be determined by the competent body.
• Not a related party transaction; completion date not available.

Financial results

• Unaudited standalone and consolidated results for quarter ended 30 June 2026 approved.
• Independent auditor's review reports dated 30 June 2026 taken on record.
• Group operates in a single cement segment; no separate segment disclosure.

Fundraising

• Raising funds up to Rs 500 crore via private-placement NCDs; terms to be finalized by Finance Committee.
• Finance Committee empowered to decide issuance terms and finalise details.

Tax/regulatory changes

• Adopted New Tax Regime (115BAA); consolidated net deferred tax liabilities reduced by ₹211.21 crore.
• Standalone net deferred tax liabilities reduced by ₹218.92 crore.

Major items and disclosures

• CCPS conversion to equity; 160,000,000 CCPS converted to 235,662,477 equity shares.
• Valuation difference ₹1,466.38 crore recognized as exceptional item.
• Labour codes impact on employee benefits recognised as exceptional item.
• WBSSIS incentive dispute: outstanding claim ~₹339.87 crore being pursued; ECL ₹11.02 crore recognized.
• Group notes: results reviewed by Audit Committee; limited review by statutory auditors.