Star Cement (540575) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 saw revenue growth but a sharp decline in profitability due to higher depreciation from new plant capitalizations and operational issues at the new clinker plant.

• Achieved preferred bidder status for 6 limestone blocks in Rajasthan with 63.9Mn tons of resources over 95.68 hectares.

• Cement sales volumes increased year-over-year, with Northeast markets driving growth, while outside Northeast volumes declined.

• Premium product sales reached a record 10.6% of trade sales in Q2 FY25.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, were approved by the Board on November 8, 2024.

Financial highlights

• Q2 FY25 revenue: INR 642 crore (up from INR 585 crore YoY); consolidated revenue: ₹47,174.58 lakhs, up from ₹39,666.84 lakhs YoY.

• Q2 EBITDA: INR 96 crore (down from INR 104 crore YoY); PAT: INR 6 crore (down from INR 41 crore YoY); consolidated PAT: ₹3,673.20 lakhs, up from a loss of ₹3,787.10 lakhs YoY.

• H1 FY25 revenue: INR 1,393 crore (up from INR 1,346 crore YoY); H1 EBITDA: INR 215 crore (down from INR 242 crore YoY); H1 PAT: INR 37 crore (down from INR 134 crore YoY).

• Per tonne EBITDA for Q2: INR 995 (down from INR 1,164 YoY); consolidated per ton EBITDA at ₹1,011.

• Cement and clinker sales volume increased 9% YoY to 9.77 lakh tons.

Outlook and guidance

• Q4 expected to see significant profitability improvement as new clinker plant stabilizes and demand picks up.

• FY25 volume growth guidance revised to 10%-11%, with Northeast expected to outperform.

• Planned cement capacity to reach 12 MTPA by FY27, with ongoing greenfield projects.

• Q4 EBITDA projected at INR 220-230 crore.

• CapEx for FY25 revised to INR 720 crore; FY26 CapEx estimated at INR 450-500 crore.