Star Cement Ltd. share price target

We change our recommendation from HOLD to BUY as we see the recent correction in stock price as a good entry point.

Star Cement’s (Star) Q1FY25 performance appears to be in the slow lane owing to muted volumes (flat YoY) and ‘one-off’ cost impact (external purchase of clinker).

Steady 11% growth in a challenging quarter assisted by 12% YoY volume increase; realisations softens

STRCEM reported a mixed set of numbers, EBITDA and blended realisation in line with our estimate, while revenue and volume are marginally ahead of our estimate. Revenue up by 10.1% YoY (+40.2% QoQ) to Rs9.13bn, mainly led by 13.8% YoY (+43.7% QoQ) increase in volume of 1.41mt (1.387mt cement + 0.024mt clinker) sales.

We change our recommendation from BUY to HOLD as recent appreciation in the stock price leaves us with little upside.

We initiate coverage on Star Cement Ltd (STRCEM) with a “BUY” recommendation and target price of Rs262 based on 10x FY26E EV/EBITDA.

Star Cement Ltd (SCL) reported decent sales growth of 5.5% YoY at Rs 651 cr driven by an underlying sales volume growth of 6.1% YoY at 1.0 mn tonnes. The sales growth was partially offset by muted cement prices which led to a marginal decline of 0.5% YoY in realization at Rs 6,764 per ton.

We maintain our BUY recommendation on the stock and roll over our estimate to FY26.