We retain our BUY rating on the stock and value the company at 8x of its FY23E EV/EBITDA to arrive at a target price of Rs 125/share, implying an upside of 14% from CMP.

Star Cement Limited (SCL) is the largest cement manufacturer in North-East India. We recommend Buy with target price of Rs 110.

We revise our target price to Rs110 from Rs.115/ earlier valuing the company at 7x of FY22E EV/EBITDA, an upside of 13% from the current level.

Initiate coverage with BUY and target price of Rs.115/share, valuing the company at 7x of its FY22E EV/EBITDA.

Volume growth to return; Siliguri plant to boost sales further Post imposition of nationwide lockdown, the plant utilisation and sales volume declined almost 90% in April. However, May and June witnessed a healthy pick-up in volume offtake, with June seeing sales volume similar to levels reported last year. At present, rural demand continues to remain strong. We also expect a ramp-up in infrastructure along the China border soon, going forward. This will drive cement demand in the Arunachal, Sikkim area. Further, commissioning of the Siliguri plant in FY21E should...

Improvement in realizations for the company (NSR +2.5% y/y)wasmajorlyoffsetbyincreaseinenergycostsdueto higherrelianceonimportedcoal(visvisprocurementof lowercostdomesticcoallastyear).Accordingly,EBITDA/te...

We maintain BUY with a revised TP of Rs 115/sh (9x FY22E consol EBITDA, inline its long term mean multiple). We maintain BUY on Star Cement with a TP of Rs 115. We continue to like Star for its leadership positioning in the lucrative NE region, which drives its industry leading op margin and healthy return ratios. During 4QFY20, good demand in east/NE drove 4% vol growth despite Covid lockdown. Weak pricing however led to profit decline. Even in FY20, weak pricing pulled down profits despite higher utilisation, debt reduction and higher treasury gains. Healthy OCF topped large capex and investor pay-outs (buyback/dividends) and net cash balance doubled YoY.

Volume growth returns; Siliguri plant to boost sales further While offtake in H1FY20 remained weak owing to weak demand and heavy monsoons, the trend seems to have reversed in the company's major market from Q3FY20. A pick-up in construction activity post floods in the north east region and commissioning of the Siliguri plant by Q1FY21E, should drive sales volumes. While the management expects the North East region to end the year at ~8-9% growth and the eastern markets at 5-6% growth, FY21E volume growth for the company is expected to be strong....

We estimate Star to deliver consol EBITDA CAGR of 8% during FY19-22E (in-line consensus). We continue to like Star for its leadership positioning in the lucrative NE region, which drives its industry leading op margin and healthy return ratios. Further, its net cash position currently boosts its expansion capability. Thus, we value it at 10x EV/EBITDA (15% premium to its 5-yr mean), leading to TP of Rs 135 (10x Sep'21E EBITDA). We maintain BUY on the stock. We maintain BUY on Star Cement with a TP of Rs 135 (10x Sep21E consol EBITDA), implying EV of USD 176/MT.

We continue to like Star for its leadership positioning in the lucrative NE region, which will further enhance as Star ramps-up clinker capacity in NE region. Star's superior op margin should gain from increased local coal availability and cost reduction from upcoming WHRS. Star currently trades at a mere 7.1/7.1x FY21/22E EBITDA (EV of USD 125/MT). Maintain BUY with a revised TP of Rs 135. We maintain BUY on Star Cement with a TP of Rs 135 (10x Sep21E consol EBITDA), implying EV of USD 176/MT

For Q1FY20, Star Cement reported a weak set of numbers led by volume decline. Total revenues for the quarter registered 9.7% YoY decline to | 468 crore (vs. I-direct estimate of | 509 crore). Volumes during the quarter stood at 0.73 MT (vs. I-direct estimates of 0.8 MT), down 9.5% YoY due to lower clinker sales. Realisations remained flat YoY at | 6,414/t (broadly in line with I-direct estimates of | 6,477/t). Production costs also remained stable YoY leading to stable EBITDA/t of | 1,637/t. However, EBITDA declined 9.5% YoY to | 119 crore (vs. I-direct estimate of | 124 crore), due to lower volumes....

Star Cement with double digit growth to outpace industry Backed by various infrastructure projects and low cost housing scheme, NER is expected to grow ~8-9% in coming years. Out of total installed capacity of ~ 11 MT in the region, Star Cement is one of the dominant players with a capacity of 3.7 MT. Out of the total installed capacity in the region, the top three players namely Star Cement (3.7 MT), Dalmia Cement (2.5 MT) and TopCem (1 MT), control ~ 65% of capacity. Most players in the region except for Star Cement and Dalmia, operate at high capacity...

Star Cement's Q3FY19 results were a mixed bag. While revenues remained below our estimates, EBITDA and PAT were higher than our estimates due to better margins Revenues during Q3FY19 grew 11.5% YoY to | 417.5 crore (below Idirect estimate of ~ | 459 crore). Sales volumes grew 5.6% YoY to 0.66 MT remaining below our estimates due to lower sales outside NER regions. Realisations grew 5.5% YoY to | 6374/t EBITDA margins remained better than our estimates at 29.5% (above I-direct estimate of 25.9%) in Q3FY19. However, it declined 836 bps...

ICICI Securities Ltd | Retail Equity Research Star Cement reported a mixed set of Q2FY19 numbers. While revenues and PAT were above our estimates, EBITDA was below our estimate. PAT was higher due to lower interest & tax expenses Revenues increased 28.7% YoY to | 362.9 crore (above I-direct estimate of | 342.5 crore) mainly led by volume growth of 27% YoY to 0.56 MT (in line with I-direct estimate: 0.55 MT) as last year volumes got impacted due to floods in the NER region...

Star Cement today announced receipt of Rs252mn of cash from the Central Government towards the freight subsidy backlog (under the NEIIPP scheme). The subsidy backlog clearance has accelerated over the past 12 months which has considerably reduced the outstanding on Star's books thus strengthening its balance sheet. We remain positive on the company owning to strong demand and pricing outlook for the North-East region, which should sustain its superior profitability. We reiterate BUY with a TP of Rs162. Acceleration in receipt of subsidy cash over the past 12 months: Star Cement...

Strong growth in core markets; Maintain BUY Star Cement's Q1FY19 consolidated EBITDA moderated 17% YoY, owing to expiration of freight subsidy and higher fuel costs, despite better pricing. Star's reported unitary EBITDA of Rs1634/MT, is still the best in the industry. Strong demand and pricing in the NE region should help Star Cement to sustain its industry leading profitability despite expiration 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 Rs162....