Star Cement Q3 Results Review - Strong Operational Performance; Retain Buy: Axis Securities

Axis Securities Report

Star Cement Ltd.'s reported marginal revenue de-growth of 1%, slightly below expectations, while volume growth was 7% YoY, in line with expectations.

However, Ebitda and adjusted profit after tax grew by 37% and 39% YoY respectively, exceeding expectations due to lower costs. The company reported a profit of Rs 74 crore compared to Rs 53 crore in Q3 FY23.

Star Cement achieved an Ebitda margin of 22.8%, surpassing the expectation of 20%, as opposed to 17.5% in the previous year, attributed to lower power/fuel, freight, and other expense costs, along with higher realisation.

Volume for the quarter stood at 0.97 million tonnes per annum (mntpa), a 7% YoY increase due to improved demand. Star Cement Ebitda/tonne was Rs 1,535, marking a 28% YoY increase, while the blended realization/tonne was Rs 6,716 compared to Rs 6,532, up 3% QoQ.

The company’s cost/tonne declined by 8% YoY to Rs 5,182 owing to lower operating costs.

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