Star Cement (540575) Q4 15/16 earnings summary

Executive summary

• FY2015-16 consolidated revenue was ₹1,716.33 crore, up 20%; cement sales volume rose 21.2% to 2.63 million MT.

• EBITDA declined 8% to ₹400.69 crore amid weaker realizations and higher input costs; PAT increased 13% to ₹134.04 crore, aided by lower depreciation.

• Production growth and lower leverage supported performance despite subdued cement demand, falling prices and cost pressure across the industry.

Financial highlights

• Consolidated net sales were ₹1,715.03 crore versus ₹1,430.43 crore in FY2014-15, up 19.8%; total revenue was ₹1,716.33 crore.

• Consolidated EBITDA was ₹400.69 crore versus ₹437.23 crore; PBT rose to ₹145.30 crore from ₹126.12 crore and PAT to ₹134.04 crore from ₹118.65 crore.

• Consolidated cement production increased 23% to 2,670,287 MT; sales volume rose 21.2% to 2,629,695 MT.

• Net worth grew 14.55% to ₹1,055.34 crore; reported revenue growth was 19.71%.

Outlook and guidance

• Management expected operational performance to improve in FY2016-17 as the economic outlook strengthened.

• Strategic priorities included expanding capacity, growing outside the North-East and steadily reducing debt with a long-term aim of becoming debt-free.

• Indian cement demand was forecast to grow 6% in FY2016-17 and 7% in FY2017-18; planned industry capacity additions were 16 MTPA and 8 MTPA, respectively.