Star Ferro and Cement Limited share price target

ICICI Securities Ltd | Retail Equity Research Star Cement's Q4FY18 results were broadly above our estimates. Revenues increased 12.6% YoY to | 526.1 crore (above I-direct estimate of | 469.6 crore) in Q4FY18 mainly led by 5.7% YoY growth in volumes to 0.8MT (vs I-direct estimate: 0.72 MT) and 6.6% YoY increase in realisations to | 6561/t. During the quarter, the company discontinued operations in Jharkhand while some of the markets in NER, which kept volume growth in single digits...

Star Cement's Q4FY18 consolidated EBITDA moderated 15% YoY on a high base, owing to expiration of freight subsidy and other non-recurring cost during Q4FY18. Star's reported unitary EBITDA of Rs1801, is still double the industry average. Strong demand and pricing in the NE region alongwith stable fuel costs should sustain Star's industry leading margins despite the expiry of its freight subsidy. Robust earnings along with faster clearance of subsidy backlog by central government should accelerate free cashflow generation and should support Star's 20%+ RoE/RoCE. We reiterate BUY with a revised TP of Rs167. Q4FY18 North East sales rebound; profit moderated on cost increase: Star's total...

ICICI Securities Ltd | Retail Equity Research Star Cement's numbers are not directly comparable to our estimates as the company reported sales net of GST while our estimates included taxes. However, in absolute terms, EBITDA, PAT remained above our estimates. Revenues declined 9.8% YoY to | 281.9 crore in Q2FY18. Volumes during the quarter declined 27.1% YoY to 0.44...

ICICI Securities Ltd | Retail Equity Research Star Ferro & Cement (SFCL) have announced the reverse merger of Star Ferro & Cement with Star Cement (SCL) on August 1, 2016. Under this scheme, Star Ferro & Cement shareholders have received 1.33 shares of Star Cement for every share held. Consequently, Star Ferro & Cement now stands dissolved and Star Cement is the new entity. The merger will help the promoter gain listing benefits as previously the promoter shares were privately held. Hence, this represents the true holding of promoters...

ICICI Securities Ltd | Retail Equity Research Star Ferro & Cement (SFCL) reported a mixed set of Q4FY17 numbers. While revenues were below our estimate, EBITDA, PAT were above our estimate. Revenues declined 7.8% YoY to | 519.2 crore (vs. I-direct estimate of | 614.0 crore) led by 16.1% YoY decline in volumes to 0.75 MT (vs. I-direct estimate of 0.99 MT) mainly led by poor demand in the east and institutional side. However, realisation increased 9.9% YoY to | 6,959 (vs. I-direct estimate of | 6206)...

ICICI Securities Ltd | Retail Equity Research Star Ferro & Cement (SFCL) reported a weak set of Q3FY17 numbers. However, they were above our estimates at the EBITDA and PAT level. SFCL's revenues declined 8.2% YoY to | 393.5 crore (vs. Idirect estimate of | 397.7 crore) led by 5.7% YoY decline in realisation to | 5,998 (vs. I-direct estimate of | 6,327) and 2.7% YoY fall in volumes to 0.66 MT (vs. I-direct estimate of 0.63 MT) EBITDA/tonne in the quarter fell 3.4% YoY to | 1,315/t (vs. I-direct estimate of | 1,077/t) mainly led by higher raw material (RM) cost/t...

Star Ferro & Cement's (SFCL) Q2FY17 results were above our estimates. Revenues increased 17.4% YoY to | 365.8 crore (above Idirect estimate of | 349.5 crore) led by 28.1% YoY increase in volumes to 0.60 MT (vs. I-direct estimate of 0.62 MT) while realisation declined 8.4% YoY to | 6,086 (vs. I-direct estimate of | 5,674). Geographically, the company saw 23.0% YoY growth in volumes in North East and 36.0% YoY growth in volumes outside North East On the margin front, EBITDA margin declined 163 bps to 16.1% led by an increase in raw material expenses (up 52.0% YoY). However, it...

ICICI Securities Ltd | Retail Equity Research Star Ferro & Cement's Q1FY17 results were below our estimates. SFCL's revenues increased 9.9% YoY to | 449.1 crore (below I-direct estimate of | 541.7 crore) led by 22.4% YoY increase in volumes to 0.76 MT while realisation declined 10.2% YoY to | 5,948 EBITDA margins declined from 29.7% in Q1FY16 to 20.4% (below Idirect estimate of 23.0%). EBITDA/tonne was at | 1,212/tonne The board has approved a reverse merger of Star Ferro & cement with Star Cement. Under this scheme, Star Ferro & Cement...

ICICI Securities Ltd | Retail Equity Research Star Ferro's (SFCL) revenues increased 11.1% YoY to | 563.2 crore (above I-direct estimate of | 509.8 crore) led by 10.0% YoY increase...

SFC's clinker capacity currently stands at 2.6 mt at Meghalaya. The company expanded its cement capacity to 3.7 mt (3 mt owned and 0.7 mt hired). The owned capacity of 3 mt includes 1.6 mt grinding in Assam and 1.4 mt grinding at Meghalaya.

We recently met Star Ferro & Cement (SFC). The company, being the leader in North-East, enjoys superior operating margins (EBITDA at Rs1776/t vs. industry average of ~ Rs 800/t) led by higher realisations in the region. Capacity expansion in FY13 has resulted into strong volume growth during FY14-15 (50% CAGR).