Star Cement (540575) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 performance was subdued due to severe monsoon, election disruptions, and exceptional costs from new capacity ramp-up, with market share in Northeast India rising from 25% to 27% and premium sales reaching a record 9.2% of trade sales.

• Unaudited standalone and consolidated financial results for the quarter ended 30th June 2024 were approved by the Board on 9th August 2024, reflecting recent operational expansions and subsidiary performance.

• Commissioned new 3.3 MTPA clinker unit in Meghalaya in April 2024, producing 54KT in Q1 FY25, and signed an 18MW group captive PPA with JSW Green Energy.

• Management expects demand to recover post-monsoon, with further market share gains in the Northeast.

Financial highlights

• Q1 FY25 consolidated revenue was ₹75,100.57 lakhs (INR 751 crore), down year-over-year; EBITDA stood at INR 118 crore, a 15% decline, with EBITDA per ton at INR 1,018.

• PAT dropped to INR 31 crore from INR 93 crore, and consolidated net loss was ₹1,313.28 lakhs, impacted by higher depreciation, interest, and one-time clinker purchase costs.

• Per-ton EBITDA was INR 1,018, down from INR 1,185 year-over-year; outside Northeast, EBITDA per ton was INR 250.

• Gross cash accruals at INR 104 crore, down 17% year-over-year.

• Basic and diluted EPS for Q1 FY25 stood at ₹(0.32), compared to ₹2.31 in Q1 FY24.

Outlook and guidance

• Full-year volume growth target revised to 15% for the next three quarters, with full-year EBITDA per ton guidance at INR 1,500, supported by cost savings from cessation of clinker purchases and SGST benefits.

• SGST benefit from Assam to add INR 300 per ton from Q2 onward; full financial impact of new plant incentives to be realized from Q2 FY25.

• Plans to increase green energy share to 55% by FY26 and achieve net zero carbon footprint by 2050.

• CapEx for FY25 estimated at INR 835 crore, with INR 110 crore already spent in Q1; net debt expected to rise to INR 350 crore by year-end.

• Upcoming 12MW WHRS and AFR processing unit expected to reduce power costs from Q3 FY25.