Star Cement Reports 20% Volume Growth and Record EBITDA in Q2
Star Cement Limited achieved robust Q2 results with 20% year-over-year volume growth, reaching 11.73 lakh tons in cement and clinker sales. Revenue increased by 26% to INR 811.00 crores, while EBITDA doubled to INR 194.00 crores, marking the company's highest ever quarterly EBITDA. Regional sales showed strong growth, with North East up 2% and Rest of East surging 45%. The company plans to expand its cement capacity from 7.67 MTPA to approximately 10 MTPA, with a 2 MTPA addition planned for the coming fiscal year. Shareholders recently approved a resolution to raise funds through securities issuance, supporting future growth initiatives.
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Star Cement Limited has reported robust performance for the second quarter, showcasing significant growth in sales volume and profitability despite market challenges.
Strong Volume Growth and Financial Performance
Star Cement achieved a remarkable 20% year-over-year volume growth in Q2, with cement and clinker sales reaching 11.73 lakh tons. This growth is particularly noteworthy considering the demand deferment ahead of the GST rate reduction from 28% to 18% for the cement sector.
The company's financial results for the quarter were equally impressive:
| Metric | Q2 | YoY Growth |
|---|---|---|
| Revenue | 811.00 | 26% |
| EBITDA | 194.00 | 99% |
| EBITDA per ton | 1,650.00 | 66% |
Star Cement's EBITDA of INR 194.00 crores for Q2 marks the highest ever quarterly EBITDA in the company's history, reflecting strong operational efficiency and market positioning.
Regional Performance
The company's growth was driven by strong performance across its operating regions:
- North East (NE) sales grew by 2%
- Rest of East (ROE) sales surged by 45%
This balanced growth across regions indicates Star Cement's strengthening market presence and effective regional strategies.
Future Outlook
Star Cement expects strong demand momentum from Q3 onwards, which could further boost its performance in the coming quarters. The company's management expressed optimism about the sector's growth prospects, particularly following the GST rate reduction.
Corporate Actions
In a separate development, Star Cement recently conducted a postal ballot for shareholder approval on raising funds through the issuance of securities. The results showed overwhelming support for the resolution:
- 99.89% of the total votes cast were in favor of the special resolution
- The resolution saw participation from various shareholder categories, including promoters, public institutions, and non-institutional shareholders
This approval provides Star Cement with the flexibility to raise capital for future growth initiatives and expansion plans.
Capacity Expansion Plans
Star Cement has outlined ambitious expansion plans, aiming to increase its cement capacity to approximately 10 MTPA. The company's current capacity stands at 7.67 MTPA, with plans to add 2 MTPA in the coming fiscal year.
| Fiscal Year | Cement Capacity (MTPA) |
|---|---|
| Current | 7.67 |
| Planned | 9.67 |
This expansion strategy aligns with Star Cement's vision of strengthening its market position and capitalizing on the expected growth in cement demand across its operating regions.
Star Cement's strong Q2 performance, coupled with its expansion plans and recent shareholder approval for fund-raising, positions the company well for sustained growth in the competitive cement sector. Investors and industry observers will be keenly watching the company's execution of its growth strategy in the coming quarters.
Historical Stock Returns for Star Cement
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.79% | +1.56% | -12.54% | +4.46% | +20.88% | +151.32% |
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