Star Cement Limited announced that its subsidiary, Star Cement North East Limited, has been declared the preferred bidder for a significant limestone block in Rajasthan, marking a strategic move to secure raw materials for its cement manufacturing operations.

Key Details of the Limestone Block

The limestone block, known as Parewar (SN-IV), is located in Joga village, Ramgarh tehsil, Jaisalmer district, Rajasthan. Spanning an area of 960 hectares, the block boasts estimated limestone resources of 271.38 million tonnes, positioning it as a valuable asset for the company's future operations.

Strategic Implications

This development is crucial for Star Cement's long-term growth strategy, as limestone is a primary raw material in cement production. Securing access to such a substantial limestone reserve could potentially support the company's manufacturing capabilities for years to come.

Competitive Bidding Process

The preferred bidder status was achieved through a competitive e-auction process conducted by the Government of Rajasthan. This success underscores Star Cement North East's commitment to expanding its resource base and strengthening its position in the cement industry.

Company's Disclosure

In compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Star Cement Limited promptly informed the stock exchanges about this development. The company's proactive disclosure aligns with its commitment to transparency and adherence to regulatory requirements.

Company Performance and Future Plans

Star Cement reported a turnover of ₹2,910.00 crore in the financial year 2024. The company currently operates with a grinding capacity of 7.7 MTPA and a clinker capacity of 6.1 MTPA. It holds a significant 26.5% market share in the northeastern region of India.

Looking ahead, Star Cement has planned a capex of ₹380.00 crore for the second half of the current financial year. The company is also working on two upcoming units in Assam, further solidifying its presence in the region.

Market Impact

While the immediate market reaction to this news remains to be seen, securing raw material sources is generally viewed positively in the cement sector. It can potentially lead to better cost management and supply chain stability in the long run. However, Star Cement's shares closed at ₹279.95, declining 4.40% on the BSE following the announcement.

Looking Ahead

As Star Cement North East moves forward as the preferred bidder, the next steps will likely involve finalizing the acquisition process and integrating this new asset into the company's overall operational strategy. The mining lease will enhance Star Cement's long-term raw material security once all necessary clearances and agreements are completed.

Stakeholders will be keen to see how this development translates into operational efficiencies and potential growth opportunities for Star Cement Limited in the coming years. The company's strategic move to secure this limestone block demonstrates its proactive approach to resource management and long-term planning in the competitive cement industry landscape.

Star Cement Limited , a prominent player in the Northeast Indian cement market, has reported robust financial results for the first quarter, demonstrating significant growth and outlining ambitious expansion plans.

Financial Highlights

The company's revenue for Q1 rose to Rs. 847.00 crores, marking a 15% increase from Rs. 736.00 crores in the same quarter last year. More impressively, EBITDA nearly doubled to Rs. 230.00 crores from Rs. 118.00 crores year-over-year, while profit after tax more than tripled to Rs. 98.00 crores from Rs. 31.00 crores.

Star Cement's operational efficiency also showed substantial improvement, with EBITDA per ton rising to Rs. 1,774.00 from Rs. 1,018.00 in the previous year. The company's Deputy Managing Director, Tushar Bhajanka, attributed this performance to improved demand and cost management strategies.

Sales and Market Share

During the quarter, Star Cement sold 12.22 lakh tons of cement and 0.74 lakh tons of clinker. The company maintains a strong presence in the Northeast region, which accounts for 73% of its sales, with a market share of 27-28%.

Expansion Plans

Star Cement has outlined aggressive expansion plans to capitalize on the growing demand in its core markets and beyond:

1. A 2 million ton capacity plant in Silchar, expected to be operational by January/February 2026.
2. Another 2 million ton plant in Jorhat, slated for completion by 2027.
3. A major expansion into Rajasthan, with plans for a 3 million ton clinker plant and a 4 million ton grinding unit, requiring an investment of Rs. 2,400.00-2,500.00 crores.

Diversification and Sustainability Initiatives

The company has also diversified its product offerings by commissioning an AAC block plant. Additionally, Star Cement is pursuing green energy initiatives, including plans for 40 megawatts of solar power capacity.

Financial Outlook

Management expects to receive Rs. 230.00-250.00 crores in incentives. The company's CFO, Manoj Agarwal, reported a current net debt of Rs. 320.00 crores, which the company considers manageable given its strong cash flow position.

Market Outlook

Star Cement projects the Northeast market to grow at a 10% CAGR over the next 3-4 years, driven by infrastructure projects and increasing cement consumption. The company aims to maintain its strong market position while expanding into new territories.

Tushar Bhajanka commented on the results, stating, "Our performance this quarter reflects the strong demand in our core markets and the success of our operational strategies. We are well-positioned to capitalize on the growing infrastructure needs in the Northeast and are excited about our expansion plans in Rajasthan."

As Star Cement continues to strengthen its position in the Northeast and eyes new markets, investors and industry observers will be keenly watching the company's execution of its ambitious growth plans in the coming years.