Star Cement (540575) Q4 19/20 earnings summary

Executive summary

• FY20 cement sales volumes rose 6% and consolidated revenue increased 1% YoY, while EBITDA and PAT declined amid weak demand, higher fuel costs, floods and the March lockdown.

• Operations remained cash-generative with low gearing; the 2 MTPA Siliguri grinding project and planned clinker expansion underpin longer-term growth, subject to demand recovery and execution.

Financial highlights

• Consolidated revenue from operations was ₹1,843.86 crore vs ₹1,831.04 crore in FY19; EBITDA was ₹423.81 crore vs ₹454.63 crore.

• Consolidated PBT was ₹321.52 crore vs ₹334.61 crore; PAT after non-controlling interest was ₹285.55 crore vs ₹298.78 crore.

• Consolidated cement production, including hired grinding units, was 2.89 Mn tonnes vs 2.70 Mn; sales were 2.88 Mn tonnes vs 2.71 Mn.

Outlook and guidance

• FY21 visibility was limited after first-quarter demand destruction; matching FY20 performance was described as an achievement in the prevailing conditions.

• Siliguri’s 2 MTPA grinding unit was expected to commission in H2 FY21; lockdown, labour shortages and heavy rain delayed construction by an estimated six months.

• Plans called for a 2 MTPA clinker-capacity expansion after Siliguri commissioning and a 10 MTPA business around 2025; limestone reserves were stated to exceed 80 years at expanded capacity.

• Over 3–4 years, the targeted sales mix was 40% Eastern India and 60% North East; regional market growth was expected to outpace the national average.