Star Cement - Capacity Expansion To Drive Growth; Outlook Remains Positive: Axis Securities

Axis Securities Report

Increased cement demand is anticipated to continue in the East and North-East regions of the country, driven by higher capex towards infrastructure and affordable housing. Star Cement Ltd. is well-positioned to meet the growing cement demand in these regions with its upcoming capacity.

It is expected to grow its volume, revenue, and Ebitda at CAGRs of 12%, 22%, and 19%, respectively, during FY23-FY26E.

The stock is currently trading at 14 times and 10 times FY25E/FY26E enterprise value/Ebitda.

We maintain our Buy rating on the stock with a target price of Rs 250/share, implying an upside potential of 20% from the current market price.

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