STARCEMENT - Star Cement

📊 NSE: STARCEMENT 🏢 Cement - North India 📅 Last Updated: 12/14/2025 13:43

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 8.06% YoY to INR 3,173.96 Cr in FY25. AAC block segment is expected to contribute INR 50-60 Cr annually, up from current minimal levels of INR 13-14 Cr.

Geographic Revenue Split

71% of sales volume is concentrated in North-East India, with the remaining 29% coming from Eastern India markets.

Profitability Margins

Consolidated PAT margin moderated to 5.3% in FY25 from 10.1% in FY24. Q2 FY26 showed recovery with highest-ever EBITDA, PBT, and PAT for a second quarter.

EBITDA Margin

Consolidated EBITDA margin was 18.56% (INR 589.21 Cr) in FY25, a slight 1.1% YoY increase. EBITDA per ton moderated to INR 1,223 in FY25 from INR 1,281 in FY24.

Capital Expenditure

The company is undergoing a sizeable expansion of approximately INR 3,000 Cr to increase cement capacity and market reach.

Credit Rating & Borrowing

CRISIL Stable rating maintained. The company has a robust financial profile with a low adjusted debt/networth ratio of 0.05x and high interest coverage of 46.7x.

⚙️ Operational Drivers

Raw Materials

Coal (80% sourced via FSA), Clinker (100 KT sold in Q2 FY26), and Fly Ash (used for AAC blocks).

Import Sources

Sourced primarily from North-East India (locational advantage) and Nagaland (coal).

Key Suppliers

80% of coal is procured through Fuel Supply Agreements (FSA) with government-linked entities; Nagaland local sources provide the balance.

Capacity Expansion

AAC plant capacity is 16,000 CBN (ramped to 18,900 CBN/month at 60% utilization). Cement expansion of INR 3,000 Cr is ongoing to scale beyond current regional limits.

Raw Material Costs

Fuel cost decreased to INR 1.25 per kcal in Q2 FY26 from INR 1.35 per kcal in the previous quarter, a 7.4% reduction.

Manufacturing Efficiency

AAC plant achieved 60% capacity utilization during the off-season; WHRS 12 MW ramp-up is expected to boost margins.

Logistics & Distribution

Average lead distance for distribution is 230 km, reflecting a localized regional focus.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be driven by a INR 3,000 Cr capacity expansion, ramping up the AAC block business to INR 60 Cr revenue, and increasing the premium cement sales ratio which improved to 13.1% in Q2 FY26.

Products & Services

PPC Cement, Premium Cement, AAC Blocks, and Clinker.

Brand Portfolio

Star Cement.

New Products/Services

AAC Blocks (Autoclaved Aerated Concrete) launched recently, expected to contribute 12-15% EBITDA margins.

Market Expansion

Diversifying into Eastern India to reduce the 71% volume concentration in the North-East.

Market Share & Ranking

Market leader in the North-East region of India.

🌍 External Factors

Industry Trends

The industry is shifting toward sustainability (WHRS) and consolidation; GST reduction to 18% is a major tailwind for the cement sector.

Competitive Landscape

Facing competition from pan-India players entering the North-East and fragmented small-scale operators.

Competitive Moat

Durable moat through a dominant dealer network in the North-East and locational advantages for raw material procurement that competitors from outside the region cannot easily replicate.