Northeast-Based Small-Cap Cement Player Expands Resource Base, Sees No Immediate Impact from Adani-Birla Consolidation
Star Cement Secures Strategic Limestone Block in Assam, Strengthening Regional Dominance
Star Cement Limited has secured a significant raw material source, emerging as the preferred bidder for the North Boro Hundong Limestone Block (Part – A) in an e-auction conducted by the Government of Assam. The limestone block, located in the Dima Hasao district, spans 200 hectares and holds an estimated limestone reserve of 192.36 million tonnes. This acquisition reinforces Star Cement’s supply chain, ensuring long-term material security in a region where it enjoys a stronghold.
Limestone is a crucial raw material in cement manufacturing, valued for its durability, weather resistance, and its dominant role in the cement-making process. By securing this limestone block, Star Cement aims to bolster its production capabilities and maintain a competitive edge in the northeastern market.
Despite growing consolidation trends in the cement industry, particularly with large players like the Birla and Adani groups expanding aggressively, Star Cement's management remains confident in its market positioning. The company, along with Dalmia Cement, commands nearly 60 per cent of the total cement capacity in the Northeast. Given the complexities of land acquisition and local market dynamics, the management does not foresee major consolidation risks in the near future.
For the quarter ending December 2024, Star Cement reported net sales of Rs 718.76 crore, marking a 10.34 per cent year-on-year increase from Rs 651.40 crore in December 2023. However, despite the growth in revenue, profitability faced pressure. The company’s net profit declined sharply by 87.68 per cent to Rs 9.06 crore from Rs 73.52 crore in the same period last year. EBITDA also saw a decline of 30.18 per cent, standing at Rs 106.75 crore compared to Rs 152.89 crore in December 2023.
Earnings per share (EPS) dipped to Rs 0.22 from Rs 1.82, reflecting the impact of higher costs and margin pressures. However, sales volume growth remained steady, demonstrating Star Cement’s resilience in the market.
Star Cement’s clinker production in Q3FY25 stood at 6.42 lakh tonnes, down from 7.37 lakh tonnes in the same quarter last year. Meanwhile, cement production increased to 10.82 lakh tonnes from 9.81 lakh tonnes, aligning with the company’s focus on expanding finished product output. Sales volumes grew 10 per cent year-on-year, with 10.60 lakh tonnes of cement and 0.07 lakh tonnes of clinker sold during the quarter.
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The company continues to maintain a strong foothold in the Northeast region, where it sold 8.30 lakh tonnes of cement in Q3FY25, compared to 7.32 lakh tonnes in the previous year. Sales outside the Northeast were slightly lower at 2.31 lakh tonnes compared to 2.38 lakh tonnes.
At 2:25 PM, Star Cement was trading at Rs 210 per share, reflecting a market capitalization of Rs 8,500 crore. The stock has declined by more than 8 per cent on a year-to-date (YTD) basis in 2025. While recent profitability pressures have impacted investor sentiment, the company’s strategic limestone acquisition and strong regional presence provide a foundation for future growth.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice.