Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Maintain BUY on Star Cement - Margin recovers on pricing gain - HDFC Securities

Posted On: 2021-08-18 09:23:34 (Time Zone: UTC)


Mr. Rajesh Ravi, Institutional Research Analyst, HDFC Securities

We maintain BUY on Star Cement with an unchanged TP of INR 130/share (8x its Jun'23E consolidated EBITDA). The company reported broadly in-line numbers in Q1. Consolidated net sales/EBITDA/APAT fell 15/11/ 20% QoQ to INR 5.11/0.93/0.68bn due to lower sales (mainly in the northeast region) and rising cost pressure. We expect EBITDA margin to expand FY22E onwards on production ramp-up (in Siliguri) and post WHRS commissioning (in FY23).

Q1FY22 performance: Sales volume fell 16% QoQ to 0.76mn MT, mainly on account of lower sales in the northeast. Star's sales outside this region remained flat QoQ, owing to production ramp-up at the recently commissioned Siliguri SGU. Overall utilisation fell to 54% vs 63% QoQ (higher vs 41% YoY on low base). NSR rose a modest 1% QoQ, owing to fall in sales share in the northeast. Opex came in flat QoQ, mainly on freight cost rationalisation while input cost remained flattish and fixed cost went up on lower utilisation. Logistics disruption in Meghalaya had bloated its freight cost in the preceding two quarters. Unitary EBITDA recovered 6% QoQ to INR 1,220/MT, on slight realisation gain.

Buy-back announcement: Star will be buying back up to 8.25mn shares (2% of equity) at INR 150/share, amounting to INR 1.24bn in outflow (~25% of its cash balance of INR 4.9bn at end of Mar'21). It had not announced any dividend for FY21.

Capex update and outlook: In FY22E, Star will continue to focus on ramping up Siliguri production and commissioning the 12MW WHRS (by FY23). Star's brownfield clinker expansion (3mn MT) in Meghalaya is delayed (not expected before H2FY24), owing to delays in environmental clearance. We maintain our BUY rating on the stock with an unchanged target price of INR 130 (8x Jun'23E consolidated EBITDA).

Shares of Star Cement Limited was last trading in BSE at Rs. 115.4 as compared to the previous close of Rs. 116.65. The total number of shares traded during the day was 48069 in over 984 trades.

The stock hit an intraday high of Rs. 117.45 and intraday low of 115.05. The net turnover during the day was Rs. 5564718.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.


Other Headlines:

Auto Sector Update - Will EVs impact the 'EV' - Part Deux - HDFC Securities

Automobile Sector - Monthly Quick View - Aug'21 - Mixed Performance across Segments - Reliance Securities

Axis Securities initiating coverage on ICICI Securities

Company Update - Minda Corporation - Q1FY22 - ICICI Direct

Quant Pick - PVR Ltd - ICICI Direct

Quant Pick - ONGC - ICICI Direct

Peak in the headline wholesale inflation is behind us - WPI August 2021 - Acuité Ratings

Sansera Engineering - IPO - Strong Outlook with Steady Cash Flow - Reliance Securities

APL Apollo Tubes - Journey from a semi-commodity player to a branded one - HDFC Securities

Nazara Technologies Ltd - Upbeat in medium-term, Uncertain over Long-term - YES Securities

IPO Review - Sansera Engineering Ltd - ICICI Direct

Overall index is still 0.3% lower than the pre-pandemic levels - IIP July 2021

YES SECURITIES on Monthly General Insurance & Mutual Funds Data

India urban logistics spaces expected to cross 7 million sq. ft by 2022: JLL

Neogen Chemicals - Breaking into the next orbit with a bang - HDFC Securities

Gladiator Stocks - Bharti Airtel Ltd - ICICI Direct

Gladiator Stocks - V-Guard - ICICI Direct

Balkrishna Industries - Industry export growth accelerates - ICICI Securities

HDFC Life Insurance - Exide Life Acquisition - Maintain ADD - YES Securities

Gladiator Stocks - Grindwell Norton - ICICI Direct

Gladiator Stocks - Godrej Properties - ICICI Direct

Monthly Auto Volumes - August 2021 - ICICI Direct

Stock Tales - Easy Trip Planners - ICICI Direct

IPO Review - Vijaya Diagnostic Centre Ltd - ICICI Direct

AU Small Finance Bank - Attrition at top level remains key challenge; business momentum sustained in Jul/Aug'21 - ICICI Securities

Gladiator Stocks - State Bank of India - ICICI Direct

Gladiator Stocks - PNC Infratech - ICICI Direct

Vijaya Diagnostic Centre Ltd - IPO Note - YES Securities

Consumer Durables Sector - Lockdown mars performance yet again - Institutional Research Desk at HDFC Securities

75% of the employees today want to be in office at least once a week as compared to 52% in October 2020: JLL

Gladiator Stocks - Safari Industries - ICICI Direct

Gladiator Stocks - Interglobe Aviation - ICICI Direct

IPO Review - Ami Organics Ltd - ICICI Direct

Q1FY22 GDP - 31st Aug 2021 - Acuité Ratings & Research

Avanti Feeds - Higher input prices hurt margins - ICICI Securities

Company Update - Restructuring - Aarti Industries - ICICI Direct

Q1FY22 Company Update - MM Forgings - ICICI Direct

Company Update - Arvind Fashions - ICICI Direct

Zomato - Can margins and multiples surprise? - ICICI Securities

Ujjivan Small Finance Bank - Top management change and lumpy provisioning concern to weigh on valuation in near term - ICICI Securities

Bharat Dynamics - Guided missile systems to drive orderbook and profit growth - ICICI Securities

Economy - Continued accommodation necessary despite inflationary risks: MPC minutes - ICICI Securities

InterGlobe Aviation - Annual report analysis: Liquidity management remains the mainstay in anticipation of traffic recovery - ICICI Securities

General insurance - Health remains dominant growth driver; Strong all-round performance by Bajaj Allianz - ICICI Securities

Earnings Wrap Q1FY22: Resilient earnings, limited impact of second Covid wave - ICICI Direct

Fine Organic Industries Results Review - In-line performance - HDFC Securities

Power Plus Sector Update - July witnessed strong ~10% generation growth - HDFC Securities

Information Technology Sector Update - 'Hit Refresh' - HDFC Securities

Maintain ADD on JK Cement - Healthy performance - HDFC Securities

Maintain BUY on Sadbhav Engineering - Long road to recovery - HDFC Securities


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020