Buy Star Cement, target price Rs 185: ICICI Direct

ICICI Direct has buy call on Star Cement with a target price of Rs 185. The current market price of Star Cement is Rs 150.8. Time period given by analyst is a year when Star Cement price can reach defined target.

Star Cement, incorporated in the year 2001, is a Mid Cap company (having a market cap of Rs 5994.00 Crore) operating in Cement sector.

Star Cement key Products/Revenue Segments include Cement, Scrap and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 837.78 Crore, up 32.71 % from last quarter Total Income of Rs 631.27 Crore and up 10.46 % from last year same quarter Total Income of Rs 758.43 Crore. Company has reported net profit after tax of Rs 96.12 Crore in latest quarter.

Investment Rationale
With declining fuel costs and other various initiatives such as implementation of 12 MW WHRS ,installation of railway siding at its grinding plants we build in Rs 190/t improvement in EBITDA/t from Rs 1168/t in FY23 to Rs 1360/t by FY25E. Steady RoCE profile (14%+) and healthy balance sheet instils confidence in the business model.

Promoter/FII Holdings
Promoters held 66.76 per cent stake in the company as of 30-Jun-2023, while FIIs owned 0.69 per cent, DIIs 6.23 per cent.