STARCEMENT Q3 FY26 earnings call.
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Revenue
₹880 Cr
verified against source
Revenue YoY
22.4%
reported change
EBITDA
₹127 Cr
latest reported figure
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What the record says.
Star Cement reported Q3 FY26 revenue of 880 crore (+22% YoY), driven by 21% cement volume growth to 12.31 lakh tonnes. EBITDA declined marginally to 127 crore (vs 107 crore YoY) with margins compressing ~40bps to 14.4%, impacted by a one-off logistics cost spike from an October strike. PAT surged to 160 crore (+60% YoY), aided by lower depreciation and tax. The Siliguri kiln commissioning (Jan 20-27) and premium sales mix improvement (12% to 17.1%) are positives. Management maintained FY26 volume guidance of 5.3 million tonnes with ~10% growth expected in Q4. The 4,800 crore capex plan for Bihar, Rajasthan (Nimbol + Haryana), and Umrango remains on track for FY29 commissioning. Key risks include freight cost inflation, subsidy income decline (-28% YoY), and intensifying competition in North India as incumbents add capacity. EBITDA per ton in East remains ~600-700 rupees with potential to reach 800 rupees; sustainable company-wide EBITDA/ton guidance of 1,300-1,500 holds for the future.
Colored figures show movement against the previous available record.
Guidance to track
- Full year cement volume guidance maintained at 5.3 million tonnes with Q4 expected to grow 8-10% YoY, implying broadly flat volumes in Q4 vs prior year on higher base.
- Four projects (Bihar GU 2MT, Nimbol Rajasthan 3MT clinker + 3MT grinding, Haryana 2MT grinding, Umrango 3MT clinker) totaling 4,800 crore with commissioning targeted for FY29.
- Machinery orders for Rajasthan expansion to be placed by Q3 FY27, with groundbreaking targeted for September-October 2026 after EC approval.
- Long-term EBITDA per ton guidance of 1,300-1,500 rupees for Star Cement as a whole confirmed; North India operations expected to initially earn ~1,000 rupees/ton, improving with legacy mines.
Risks flagged
- October strike in Meghalaya restricted clinker movement, forcing rake transport and increasing logistics costs by 60-70 rupees/tonne in Q3. Management expects Q4 to normalize as this was a one-time event.
- Incentive/subsidy income fell 28% YoY to 33 crore due to GST reduction from 28% to 18%. Benefit from Siliguri plant's GST input credits won't flow until 7-8 months post-commissioning.
- Dalmia commissioned a large kiln in the Northeast, adding 50-55 MT capacity to the North region. Management acknowledged excess capacity risk but maintained brand-led pricing strategy over volume discounting.
- Analyst questioned whether 2,500 crore capex for 5 MT integrated plant is realistic (vs ~3,000 crore peer benchmarks). Management defended estimate based on recent kiln experience but acknowledged estimate may be premature.
Key quotes
- We'll have to make sure and have the patience and the willpower to create a brand in the long run and not and discounting and selling and just trying to get done with the volume is not the answer to that.
- The overall capex for these four projects is about 4,800 crores total and broadly this all should be commissioning in FY29 or second half of FY29.
- Going in the future I think we do expect like 1,300 to 1,500 to be the range for EBITDA per ton for Star Cement specifically, but North I thought you asking specifically for North.
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