Star Cement (540575) Q4 17/18 earnings summary

Executive summary

• Record FY2017-18 profits: consolidated revenue from operations ₹1,633.49 crore and EBITDA ₹525.73 crore; PAT rose 70% YoY.

• Prioritised realisations and logistics savings over volume, consolidating sales in North East, North Bengal and East Bihar while exiting Jharkhand and reducing exposure in West Bihar and South Bengal.

• Used subsidy receipts to repay debt, targeting a debt-free position in FY2018-19; announced capacity growth led by a proposed 2 MTPA Siliguri grinding plant.

Financial highlights

• Consolidated net sales ₹1,633.49 crore vs ₹1,554.27 crore in FY2016-17; EBITDA ₹525.73 crore vs ₹410.77 crore.

• Consolidated PBT ₹352.59 crore vs ₹214.80 crore; PAT ₹336.18 crore vs ₹200.90 crore.

• FY2017-18 headline metrics: EBITDA margin 32.73%, PAT margin 20.58%, cash profit ₹457 crore.

• Consolidated EPS ₹7.89 vs ₹4.64; proposed final dividend ₹1 per equity share.

Outlook and guidance

• Targeted 15% volume growth in FY2018-19 through deeper market penetration and higher utilisation without compromising brand positioning.

• Proposed 2 MTPA Siliguri grinding plant targeted for commissioning in FY2019-20; planned Meghalaya clinker debottlenecking to supply it.

• Longer-term ambition: 10 MTPA capacity by 2022, including a further equivalent plant in Durgapur or Bihar after Siliguri.

• Expected to become debt-free in FY2018-19; Siliguri expansion intended to be funded largely from internal accruals with minimal debt.