Star Cement hosted conference call on May 22, 2024. In the conference call the company was represented by Mr Tushar Bhajanka-Deputy Managing Director, Mr Vinit Kumar Tiwari-CEO and Mr Manoj Agarwal-CFO.

Key takeaways of the call

Volume

Clinker production stood at 6.93 lac tonnes in Q4FY2024 as against 7.78 lac tonnes in Q4FY2023

Cement Production stood at 13.88 lac tonnes in Q4FY2024 as against 12.51lac tonnes in Q4FY2023.

The company has successfully commissioned 2 MT cement grinding unit in March 2024.

Cement sales of 13.87 lac tonnes in Q4FY2024 as against 12.35 lac tonnes in Q4FY2023.

Clinker sales stood at .24 lac tonnes in Q4Fy2024 against nil in corresponding previous year.

Geography wise North East sales stood at 10.40 lac tones in Q4FY2024 as against 9.12 lac tonnes in Q3FY2023. Outside North East cement sales stood at 3.48 lac tonnes in Q4FY2024 as against 3.23 lac tonnes.

Q4FY2024

Revenue for the quarter stood at Rs914cr in Q4FY2024 as against Rs829cr in Q4FY2023.

EBITDA stood at Rs 188 crore in Q4FY2024 as against Rs 179 crore in Q4FY2023.

PAT stood at Rs 88 crore as against RsRs 96 crore in Q4FY2023.

EBITDA per ton stood at Rs 1329/ton in Q4Fy2024 as against Rs 1448/ton in Q4Fy2023.

Trade sales stood at 84-85% of the total sales in Q4FY2024 and Non trade stood at 14-15% in Q4FY2024.

Premium contribution stood at 7% of the trade sales in Q4FY2024.

Lead distance stood at 227 kms in Q4FY2024.

Increase in freight cost in Q4FY2024 was due to the company moving material from Silguri to North East region.

Fuel Mix: Fuel mix for the quarter constituted FCA coal 4%,Bio Mass 10%, Nagarjuna coal 36% and spot coal 52%.

Fuel cost per Kilo cal stood at Rs 1.7 per Kilo cal in Q4FY2024.

Grinding unit capacity utilization stood at around 80% in Q4FY2024.

FY2024

Revenue for the year stood at Rs2911 cr in FY2024 as against Rs 2705 cr in FY2023.

EBITDA stood at Rs583crore in FY2024 as against Rs520crore in FY2023.

PAT stood at Rs295crore as against Rs248 crore in FY2023.

EBITDA per ton stood at Rs 1312/ton in Fy2024 as against Rs12978/ton in Fy2023.

Coal Supply: The company has signed a long term contract for supply of coal for 10 years with Coal India amounting to 3.6 lac tonnes. It will cost  Rs 1.5/GCV. This will result in total savings of Rs 70 cr per year for the company.

Expansion: The company commissioned its 3 million ton clinker plant which was commissioned in April 2024 however there was some technical issue which is rectified and is operating at full capacity in May 2024.

The company commissioned 2 million ton grinding unit in Assam in March,2024.

Also the company plans to set up a grinding unit in Silchar. The same is expected to be commissioned in Q3-Q4 FY2026. The company has acquired 90% of land for the same.

The company also plans to set up another 2 MT grinding unit in Assam at a cost of Rs 450 crore.

Expansion outside North East: The company is looking out for mines in Rajasthan once the company’s capacity touches 12 MT in Nort East to cater to markets in Delhi, Haryana and Punjab.

Incentive:

The company will receive SGST benefit of Rs 150-160cr in FY2025 and around RS 200 crore in FY2026.

The company will receive around Rs 300/ ton SGST benefit for clinker plant for 3MT which is commissioned in April 2024.

In addition, the Guwahati grinding unit will have tax benefit as it will be at lower tax of 17%.

CAPEX:

The company plans to incur a CAPEX of RS 1000 crore in Fy2025. The same will be funded through internal cash generation to the tune of Rs 750 crore and the balance Rs 200-300 crore through borrowings.

Prices:

Prices have remained stable in north East. While outside north east there is a decline of around Rs 300/ton when compared to Q4Fy2024.

Outlook:

The company expects volume growth to be in low single digit in Q1FY2025. The company expects volume growth of around 20% in Fy2025.

Demand was subdued in the month of April due to Eid and Bihu. In May it is subdued due to ongoing elections.

The company plans to increase its institutional share sales. However, despite decline in EBITDA per ton in institutional sales it will increase overall EBITDA and volumes.