JSWCEMENT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | JSWCEMENT | Market Cap | 15,481 Cr. | Current Price | 113 ₹ | High / Low | 162 ₹ |
| Stock P/E | 80.2 | Book Value | 48.3 ₹ | Dividend Yield | 0.00 % | ROCE | 7.16 % |
| ROE | 3.38 % | Face Value | 10.0 ₹ | DMA 50 | 120 ₹ | DMA 200 | 133 ₹ |
| Chg in FII Hold | -1.10 % | Chg in DII Hold | 0.22 % | PAT Qtr | 95.9 Cr. | PAT Prev Qtr | 58.9 Cr. |
| RSI | 40.7 | MACD | -1.58 | Volume | 8,99,110 | Avg Vol 1Wk | 28,12,101 |
| Low price | 107 ₹ | High price | 162 ₹ | PEG Ratio | -2.37 | Debt to equity | 0.56 |
| 52w Index | 12.2 % | Qtr Profit Var | 3,016 % | EPS | 1.00 ₹ | Industry PE | 30.0 |
📊 Financials: JSWCEMENT shows weak fundamentals with ROCE at 7.16% and ROE at 3.38%, reflecting poor capital efficiency. Debt-to-equity ratio of 0.56 indicates moderate leverage. Quarterly PAT improved sharply from 58.9 Cr. to 95.9 Cr., but EPS remains very low at 1.00 ₹, limiting shareholder value creation. Cash flows are likely under pressure given low profitability and high valuation multiples.
💹 Valuation: Current P/E of 80.2 is far above the industry average of 30.0, suggesting significant overvaluation. P/B ratio is ~2.34 (Current Price / Book Value), which is reasonable but overshadowed by weak earnings. PEG ratio of -2.37 highlights negative growth prospects relative to valuation. Intrinsic value appears much lower than CMP, offering little margin of safety.
🏢 Business Model & Competitive Advantage: The company operates in the cement industry, benefiting from infrastructure and housing demand. While scale and brand presence provide some resilience, low return ratios and high valuation multiples reduce its competitive edge compared to peers. Lack of dividend yield further limits investor appeal.
🎯 Entry Zone Recommendation: Current price of 113 ₹ is near its 52-week low of 107 ₹, reflecting weakness. A more attractive entry zone would be around 95–105 ₹, offering better risk-reward. Long-term investors should be cautious and accumulate only on significant corrections, given stretched valuations and weak fundamentals.
Positive
- Quarterly PAT growth from 58.9 Cr. to 95.9 Cr. shows operational improvement.
- DII holdings increased by 0.22%, reflecting domestic institutional support.
- Reasonable P/B ratio (~2.34) compared to peers.
- Strong demand outlook from infrastructure and housing sector.
Limitation
- Extremely high P/E of 80.2 compared to industry average (30.0).
- Low ROCE (7.16%) and ROE (3.38%) indicate poor efficiency.
- EPS of 1.00 ₹ is very weak relative to market cap.
- Negative PEG ratio (-2.37) signals poor growth prospects.
Company Negative News
- FII holdings decreased by 1.10%, reflecting reduced foreign investor confidence.
- Weak return ratios despite revenue growth.
Company Positive News
- Quarterly profit growth of 3,016% highlights operational turnaround.
- DII inflows suggest domestic support for the stock.
- Positioned to benefit from infrastructure demand in India.
Industry
- Cement industry P/E at 30.0 reflects moderate valuations.
- Sector growth driven by infrastructure and housing demand.
- Government spending on roads and housing supports long-term expansion.
Conclusion
⚖️ JSWCEMENT is fundamentally weak with low return ratios, high debt, and stretched valuations. Despite strong quarterly profit growth, the stock trades at unsustainable multiples. Investors should avoid fresh entry at current levels and consider accumulation only near 95–105 ₹ for better margin of safety. Long-term holding carries risk unless profitability improves significantly and valuations normalize.
I can also outline technical support/resistance levels to complement this fundamental view if you’d like a clearer entry-exit strategy.