Emkay Global Financial's research report on Star Cement
Star Cement’s consolidated EBITDA increased 42% YoY/declined 24% QoQ to Rs986mn in Q2FY24 which was 9% above Consensus estimate. EBITDA/t stood at Rs1,100 (Emkay: Rs900). Volume growth was muted at 1% YoY (down 23% QoQ) to 0.9mt, owing to subdued demand in NER (post a robust over 20% growth witnessed in Q1) and maintenance shutdown during the quarter. Company has reiterated its guidance of 13-14% volume growth in FY24, on anticipation of strong performance in H2FY24. Star has embarked on a journey to strengthen its market share in NER to over 30% (currently at 25%) by FY26- 27, by more than doubling its capacity.
Outlook
Factoring-in the recent price hikes, we raise our EBITDA by 4% for FY24-25E and revise up Sep-24E TP to Rs180/share, based on 10x EV/E; we retain HOLD on the stock.
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