ICICI Securities's research report on Star Cement
Q4FY26 was yet another strong quarter for Star Cement (Star) with EBITDA racing 20% YoY/56% QoQ (7% ahead of our estimate). Robust showings on volume (up 13% in Q4; 16% in FY26) without hurting prices (realisation inched up 0.6% QoQ) and a tight leash on costs culminated in an industry-superior EBITDA/t of INR 1,818 (highest in past 30 quarters). While we trim FY27/28E EBITDA by 6%/5% (factoring in the impact of high crude oil prices), we continue to like Star for its: 1) Impressive volume growth; 2) regional diversification story (concrete plans to set up greenfield integrated capacity in North India and a grinding unit in Bihar); 3) strong balance sheet (FY26 net debt/EBITDA of 0.2x) and decent RoE (11-13% range). We continue to value Star at 11x FY28E EV/EBITDA; maintain BUY with a revised TP of INR 260 (vs. INR 275 earlier).
Outlook
We continue to value the core business at 11x FY28E EV/EBITDA and assume an NPV for its estimated incentive income. Maintain BUY with a revised TP of INR 260 (INR 275 earlier).
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