Target: ₹277
CMP: ₹216.70
Star Cement has reported substantial growth in various metrics, with volumes increasing by 9.7% year-on-year to reach 1.6 million tonnes (mt). Blended pricing adjusted upward by 1.7% to ₹7,253 per tonne. The EBITDA margin widened to 26.8%, attributed to cost efficiencies and operational leverage gained from higher volumes.
The company’s capital expenditure (capex) plans remain robust. For FY27E and FY28E, total capex is expected to be between ₹600-700 crore and ₹1,500 crore, respectively. Funding for the FY27E capex will primarily come from internal accruals and cash reserves, while FY28E capex will utilize a combination of internal funds and debt.
Management forecasts an increase of ₹250-300 per tonne in operating costs for H1FY27, influenced by the West Asia crisis affecting packing materials and fuel expenses. A return to normal cost levels is anticipated by Q3FY27.
For FY27, management aims for a volume growth of 10-12%. The expected EBITDA per tonne will range from ₹1,500 to ₹1,700, compared to ₹1,819 in FY26, over the upcoming three years. Cement demand was sluggish in April due to elections in Assam and West Bengal; however, an uptick was observed in May.
Star Cement’s Q4FY26 results showcase effective execution with growth driven by volumes and margin enhancement. The stock currently trades at FY27E and FY28E EV/EBITDA multiples of 9.3x and 8.7x, respectively. The company now values the stock at 11.7x its rolling one-year forward EV/EBITDA, and has adjusted its target price to ₹277 due to anticipated near-term margin pressures.
Published on May 27, 2026
