Star Cement has received a 'Buy' rating from SBI Securities with a target price of ₹295, significantly above its current market price of ₹219.20. According to reports from The Hindu BusinessLine, the company delivered impressive financial results with revenue growing 22.4% to ₹880 crore, EBITDA surging 94.3% to ₹203 crore, and PAT jumping 720.3% to ₹74 crore year-on-year. The strong performance was primarily driven by robust volume growth of 21.5%, demonstrating the company's operational strength and market demand recovery.
The company has outlined ambitious expansion plans with a total capex of ₹4,800 crore for four major projects, targeting commissioning by H2FY29 or early-FY30. As reported by The Hindu BusinessLine, Star Cement's Silchar grinding unit of 2 mtpa is expected to be commissioned by February-end 2026. The expansion will significantly increase the company's cement and clinker capacities from 7.7/6.1 mtpa to 16.7/9.1 mtpa respectively by FY30. The company also plans to establish units in Bihar, Assam, Rajasthan and Haryana as part of its geographical diversification strategy.
SBI Securities has upgraded its FY26E/FY27E EPS estimates by 16.9%/2.1% to ₹7.9/8.4 respectively, citing improved demand and operating leverage. According to the brokerage report, the company plans to raise funds through QIP to meet capex needs while maintaining a Debt/EBITDA ratio of <1.5x. The new business verticals under the company's forward integration plans are expected to serve as additional growth drivers for future performance.
SBI Securities has maintained its target price at ₹295, valuing the stock at 13.9x of its rolling one-year forward EV/EBITDA. As reported by The Hindu BusinessLine, the brokerage expects the company's total cement and clinker capacities to increase significantly through its expansion plans, positioning Star Cement for substantial growth in the cement sector. The company's current market price of ₹219.20 represents a potential upside of approximately 31% to reach the target price of ₹295.
