Star Cement (540575) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 performance was impacted by floods in Assam, reduced government subsidies, delayed government funds, regional elections, and the West Asia crisis, affecting both volumes and profitability.

• Cement sales volumes grew modestly year-over-year, but EBITDA and PAT declined due to higher costs, lower incentives, and demand disruptions.

• Maintained leadership in Eastern India with 24.2% market share in North-East and expanding PAN India presence.

• Management expects demand recovery and double-digit growth in Q3 and Q4 as pent-up demand is released post-floods.

• Unaudited standalone and consolidated financial results for the quarter ended June 30, 2026, were approved by the Board on August 7, 2026.

Financial highlights

• Revenue for Q1 FY27 was INR 943 crore, up from INR 847 crore year-over-year; consolidated revenue was ₹57,630.88 lakhs, up from ₹54,473.50 lakhs YoY.

• EBITDA declined to INR 203 crore from INR 230 crore, mainly due to reduced subsidy, higher packing material costs, and shutdown expenses; EBITDA per ton fell 16% YoY.

• PAT dropped to INR 74 crore from INR 98 crore YoY; consolidated net profit after tax for Q1 FY27 was ₹2,375.65 lakhs.

• Cement sales volume up 7% YoY; NE sales flat, rest of East up 22%.

• Premium sales rose to 15.9% of trade sales, up from 12.2% YoY.

Outlook and guidance

• FY27 cement volume growth guidance revised down to 8%-9% from earlier 11%-12% due to ongoing floods and muted demand in H1.

• Roadmap to increase clinker capacity from 6.1 MTPA to 9.4 MTPA and cement capacity from 9.7 MTPA to 14.7 MTPA by FY29, with expansions in Rajasthan and Haryana.

• Expansion to be funded through internal accruals and debt, targeting net debt/EBITDA below 2x.

• Management expects cost pressures to ease in H2, with fuel costs projected to decline and EBITDA per ton for the year expected to be INR 1,500–1,600.

• The company and a subsidiary opted for a concessional income tax rate from April 1, 2026, affecting tax comparability.