STARCEMENT Q4 FY26 earnings call.
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Revenue
₹1,174 Cr
verified against source
Revenue YoY
1.9%
reported change
EBITDA
₹324 Cr
latest reported figure
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What the record says.
Star Cement delivered Q4 FY26 results with revenue of 1,174 crore (+1.9% YoY) and PAT of 147 crore (+20.5% YoY), with EBITDA margin expanding 200bps to 27.6%. Full-year FY26 revenue came in at 3,776 crore (+19.4% YoY) with PAT of 390 crore, more than doubling from FY25's 159 crore. The company achieved 5.3 million tons volume at the upper end of FY26 guidance and targets 10-12% volume growth for FY27. Key near-term headwinds include fuel cost inflation (estimated 250-300 rupees/ton impact in H1) due to SSA coal shortages and rail rack diversions, and expected subsidy reduction of 40-50 crore to approximately 140-150 crore in FY27. Expansion capex of 600-700 crore is planned for FY27 targeting Bihar grinding unit commissioning by Q1-Q2 FY29, with Rajasthan and Nimbahera plants targeted for H2 FY29. Competitive entry by mainland players (Shri Cement, Ambuja, JK Lakshmi) poses a long-term risk to Northeast pricing, though management believes the market is relatively small and 3-4 years away from meaningful impact.
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Guidance to track
- Targeting 10-12% cement volume growth in FY27 based on current demand visibility, up from 5.3 million tons achieved in FY26. Clinker sales expected to remain flat at ~3.5 lakh tons.
- Management expects to maintain EBITDA per ton in the 1,500-1,700 range for the next three years until Rajasthan project comes online, with eventual normalization to 1,300-1,400 post-ramp-up.
- Capital expenditure for FY27 estimated at 600-700 crore as the company begins land acquisition and approvals for grinding units in Nimbahera, Harya, and Bihar, with land acquisition expected to complete by October.
- Overall subsidies in FY27 expected to reduce by 40-50 crore compared to FY26's 184 crore, bringing the estimate to approximately 140-150 crore due to GST rate reductions.
Risks flagged
- Rail racks diverted to thermal power plants causing SSA coal shortages; estimated 250-300 rupees per ton cost impact in Q1-Q2 FY27 before normalization. This will partially offset pricing improvements of 6-10 rupees achieved in April-May.
- Shri Cement, Ambuja, and JK Lakshmi have announced entry into Northeast region. Management acknowledges 3-4 year timeline for meaningful impact but admits there will be pricing pressure and market share erosion once competitors commission their plants.
- Shipping clinker from Nimbahera to Bihar via railway siding will incur incremental freight costs. While STSC benefits (up to 150-200% of investment) have been applied for, the net impact on EBITDA per ton is uncertain and management admitted this will not achieve the 1,300-1,400 target initially.
- Expected 40-50 crore reduction in government subsidies/incentives for FY27 creates absolute profit headwind. Management acknowledged this will have a bit impact on profitability in absolute terms.
Key quotes
- I think there will be a significant pressure in the market right because everyone will be running for the same capacity and the market is relatively small right so even a million plant in a big market makes a big impact.
- I think in this year, I think for the next three years till when we get the Rajasthan project I think the EBITDA should be between 15 to 1700 right at least and once we get the Rajasthan of course for the first one year because we'll be absorbing fixed cost... I think in the longer run we should be able to maintain it at about 1,300-1,400.
- We will start like creating brand awareness at least about 8 months before we actually start the commercial productions. Any planning that we do before that may be a bit premature.
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