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Informist, Friday, Aug. 7, 2026

 

By Vidhi Thacker

 

MUMBAI – Star Cement Ltd. is expected to report a sharp fall in its net profit for the June quarter driven by high operating cost due to an increase

in fuel and packaging cost, according to brokerages tracking the company. The company's revenue growth will be driven by high cement prices, strong demand for construction, and organic volume growth.

 

The cement manufacturer is expected to report a consolidated net profit of INR 830 million for the June quarter, according to the average of estimates from six brokerages. This is down 16% on year and down 46% sequentially. The company had reported a net profit of INR 985 million in the year-ago quarter. The highest estimate for the company's net profit is INR 1.05 billion from Anand Rathi Share and Stock Brokers Ltd. and the lowest estimate is INR 721 million from PhillipCapital (India) Pvt. Ltd.

 

Star Cement's consolidated net sales for the June quarter are expected to be INR 9.36 billion for the June quarter, up around 3% on year but down 20% on quarter. The company had reported net sales of INR 9.12 billion in the year-ago quarter. The highest estimate for the company's net sales is INR 9.85 billion from Axis Securities Ltd and the lowest estimate is INR 9.07 billion from JM Financial Institutional Securities Pvt. Ltd.

 

The growth in Star Cement's net sales will be driven by higher demand for cement due to infrastructure spending by both central and state government on roads, railways, metro projects, urban infrastructure, and industrial infrastructure, brokerages said. Rural demand also improved during the quarter due to improved agricultural income and wage growth, Axis Securities said.

 

Even though demand was favourable, it was affected slightly by intense heatwaves and lack of labour due to state assembly elections in West Bengal and Tamil Nadu, Anand Rathi said.

 

The rise in fuel and packaging costs due to the war in West Asia is likely to impact the company's profitability. During the quarter, the price of imported pet coke increased to $155-$160 per tonne from $115-$120 per tonne in the previous quarter and imported coal prices rose to between $140 and $150 per tonne, Axis Securities said. Cement companies raised prices during the quarter to offset the sharp rise in fuel costs. Price hikes were in the range of INR 20-40 per bag, Axis said.

 

Star Cement's earnings before interest, taxes, depreciation, and amortisation are estimated at INR 2.12 billion for the June quarter, according to the average of five estimates, down 8% on year. The company had reported an EBITDA of INR 2.3 billion in the year-ago quarter. The highest estimate

for the company's June quarter EBITDA is INR 2.35 billion from Axis Securities and INR 1.99 billion from PhillipCapital.

 

The company's EBITDA margin and EBITDA per tonne are expected to fall due to higher costs and lower realisation, brokerages said. Chances of cement price hikes in the near future are limited as the industry will enter its weak demand season due to monsoon, brokerages said. Any further fuel cost inflation is expected to flow through the company's profit and loss statement for the September quarter, Elara Securities said.

 

Star Cement is a cement manufacturer with a strong foothold in North-eastern India, West Bengal, and Bihar. It will detail its June quarter earnings Friday. At 1214 IST, the shares of the company traded at INR 202.55, down slightly. The stock is down nearly 8% since the company reported its March quarter earnings on May 22.

 

All the 11 brokerage reports on the company available with Informist have a "buy" recommendation on the stock, with an average target price of INR 283, which is 39% higher than the current market price.

 

Following are the Apr-Jun earnings estimates for the company from six brokerages in a descending order of net profit, in INR millions:

 

Brokerages	Net Sales	Net Profit	EBITDA
Anand Rathi Share and Stock Brokers Ltd.	9,487	1,050	--
Axis Securities Ltd.	9,850	910	2,350
JM Financial Institutional Securities Pvt. Ltd.	9,075	809	2,177
HDFC Securities Ltd.	9,326	754	2,026
Elara Securities (India) Pvt. Ltd.	9,247	736	2,059
PhillipCapital (India) Pvt. Ltd.	9,142	721	1,986
Averages	9,355	830	2,120

 

End

 

Edited by Pankaj Aher

 

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