Star Cement Limited
Key Quantitative Figures
Production Metrics (Q1 FY27):
- Clinker production: 9.10 lakh tons (vs. 8.90 lakh tons in Q1 FY26)
- Cement production: 13.08 lakh tons (vs. 12.31 lakh tons in Q1 FY26)
Sales Volume (Q1 FY27):
- Cement sales: 13.02 lakh tons (vs. 12.22 lakh tons in Q1 FY26)
- Clinker sales: 0.52 lakh tons (vs. 0.74 lakh tons in Q1 FY26)
- Geographical distribution: Northeast - 8.71 lakh tons (vs. 8.67 lakh tons); Outside Northeast - 4.31 lakh tons (vs. 3.55 lakh tons)
- Blend mix: 15% OPC, 85% PPC
Financial Performance (Q1 FY27):
- Total revenue: INR902 crores (vs. INR847 crores in Q1 FY26)
- EBITDA: INR203 crores (vs. INR230 crores in Q1 FY26)
- Profit after tax: INR74 crores (vs. INR98 crores in Q1 FY26)
- EBITDA per ton: INR1,497 (vs. INR1,774 in Q1 FY26)
Operational Parameters (Q1 FY27):
- Premium sales: 15.9% of overall sales
- Trade share: 80%
- Lead distance: 210 km
- Clinker factor: 66.5%
- Fuel cost: INR1.55 per unit (vs. INR1.33 in Q4 FY26)
- Green share (including WHRS): 3%
Strategic Updates and Guidance
Volume Guidance Revision:
- Full-year volume growth revised down to 8-9% from previous guidance of 11-12%
- Q2 FY27 expected to see volume degrowth due to severe flooding in Assam
- Expect pent-up demand in Q3 and Q4 FY27
Expansion Projects:
- Rajasthan project (Nimbol clinker plant): Applied for public hearing for environmental clearance (EC)
- Expect EC by September/October 2026
- Groundwork to start mid-October to November 2026
- Project timeline: 18-20 months from November 2026 (commissioning in Q1 FY29 or Q4 FY28)
- Total capex estimate: INR2,600-2,700 crores (including GST)
Capex Plan:
- Q1 FY27 capex: INR93 crores
- Full-year FY27 capex guidance: INR500 crores maintained
- FY28 capex: Approximately INR1,500 crores
West Bengal vs Bihar Grinding Unit Decision:
- Awaiting West Bengal industrial policy expected by 15th August 2026
- May reconsider Bihar grinding unit investment if West Bengal policy favorable
- Existing Siliguri plant has land for additional grinding unit and railway siding
Operational Challenges and Cost Initiatives
Q1 Cost Pressures:
- Reduced subsidy
- Increased packing material costs
- Shutdown expenses for kiln maintenance
- Fuel cost increased due to coal diversion to power plants reducing FSA availability
Fuel Mix (Q1 FY27):
- FSA coal: 45%
- Spot contracts: 30%
- Biomass and other sources: Balance
Cost Reduction Initiatives:
- Railway siding in Silchar expected by October/November 2026
- Introduction of EVs in specific routes
- Wagon tippler in Siliguri expected to save INR150 per ton
- Solar group captive opportunities being evaluated for Q3/Q4 FY27
Subsidy and Government Policy Impact
Assam Subsidy Change:
- New policy divides total subsidy (INR794 crores) over 12 years
- FY27 expected subsidy reduced to INR115 crores from INR145 crores
- Subsidy outstanding: INR130 crores as of Q1 FY27
- Received INR50 crores in Q1 FY27
GST Impact:
- GST reduction from 28% to 18% resulted in INR40 crores hit to subsidy in Q1 FY27
- Impact expected to normalize after September 2026
Market and Demand Outlook
Northeast Market:
- Q1 FY27 industry growth: ~1-1.5%
- Star Cement Northeast growth: 0.4%
- Full-year industry growth expectation: ~7%
- Full-year company Northeast growth expectation: 8-9%
Pricing Environment:
- Prices broadly stable in Northeast, Bihar, and West Bengal
- Marginal increase of INR2-3 per bag from Q1 to current levels
- Bihar prices ~INR10 higher than other regions
Capacity Additions:
- No major clinker capacity additions expected in FY27
- Next 3 years: Expected 1 million ton capacity additions each from 2 players
- Current Northeast clinker capacity: ~15.5-16 million tons
- Current Northeast grinding capacity: ~23-24 million tons
Non-Cement Business
- Building Solutions division (AAC and RMC) revenue guidance: INR150 crores for FY27
- Currently below annual run rate but expected to reach target by Q4 FY27
Financial Position
- Not actively considering QIP at current juncture
- Expect to manage expansion with 1.5x-1.6x debt-to-EBITDA ratio