Star Cement Maintains Strong Growth Outlook Despite Margin Pressure, Says Axis Securities Maintaining 'Buy'

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Axis Securities Report

With its upcoming capacity expansion, Star Cement Ltd. is well-positioned to capitalise on the rising demand in its operating region, primarily the North-East.

We project Star Cement will achieve a CAGR of 12%/16% in volume and revenue and a 31% /52% CAGR in Ebitda and PAT over FY25- FY27E.

The stock is currently trading at 12x and 11x FY26E/FY27E EV/Ebitda.

We maintain our Buy rating on the stock with a target price of Rs 325/share, implying an upside potential of 27% from the current market price.

Risks and mitigation

The company has established an extensive and well-designed risk management framework to identify, assess, and mitigate key risks that may hamper its operating continuity, growth and/or profitability. The Board of Directors has formed a Risk Management Committee to stringently oversee its risk assessment and mitigation process and advise the management as required.

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