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Star Cement Ltd. reported beat on all fronts. The company posted 30.3% YoY growth in revenue (down 11.1% QoQ) to Rs 6.7 billion led by 29.0% YoY increase in volume (down 14.9% QoQ) and 1.1% YoY increase in realization to Rs 6,796 (up 4.5% QoQ).
Ebitda/adjusted profit after tax reported up 33.9% / down 0.6% YoY to Rs 1.2 trillion/ Rs 676 million.
We like Star Cement due to its strong presence in the lucrative North East region and improving utilization. However, we factor significant increase in net debt to Rs 8.1 trillion (FY24E) from Rs 6.6 trillion (FY22) net cash due to Rs 21 trillion capex (FY22-24E) for 3 million tonnes per annum/ 2 mtpa/ 2 mtpa clinker/ grinding unit/ grinding unit expansion at Meghalaya/ Guwahati/ Silchar, Assam (to start by December 2023/ January 2024/ March 2024).
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