Star Cement Ltd. share price target

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 120/share, implying an upside of 12% from CMP.

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 130/share, implying an upside of 12% from CMP.

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...

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.