Understanding JSW Cement’s Valuation Metrics
JSW Cement’s price-to-earnings (PE) ratio stands at an elevated 155.7, a figure that initially suggests a premium valuation relative to earnings. However, this high PE is partly influenced by the company’s modest profitability, with a return on capital employed (ROCE) of just 5.0% and return on equity (ROE) at 1.55%. These returns are relatively low for the cement industry, indicating that earnings generation is currently subdued.
The price-to-book (P/B) ratio of 2.41 indicates that the market values JSW Cement at more than twice its net asset value, which is not uncommon in capital-intensive sectors but warrants scrutiny given the company’s earnings profile. Meanwhile, the enterprise value to EBITDA (EV/EBITDA) multiple of ...
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