Target: ₹265
CMP: ₹274.65
We interacted with Tushar Bhajanka, Deputy MD of Star Cement, to understand the company’s growth plans and the demand-supply outlook in the Northeast.
Key takeaways: The Northeast remains one of the fastest cement consuming regions, with about 10 per cent medium-term CAGR backed by infrastructure spends of Central/State governments; Led by upcoming capacity expansions, Star aims to strengthen its leadership in the Northeast, beyond its current volume market share of around 27 per cent; The unlikely entry of any new player in the Northeast in the next about 4Y would augur well for cement prices; Star aims to diversify geographically, with clear expansion plans in Rajasthan; it has already secured limestone mines in the state through government auctions; It is on track to reach capacity of around 18mtpa (vs 8mtpa currently) in the medium term; and focus remains on cost-efficiency through capex on efficiency parameters.
We like Star’s regional dominance and endeavour to stretch its leadership over peers in the Northeastern market. Further, entry into Rajasthan will help it shed the tag of a regional player and establish its brand in North India, coupled with over 2x its existing capacity base. We note that the recent surge in the stock price (up >30 per cent in the past 2M) could limit upside in the near term. We maintain BUY and our earnings estimates, with a TP of ₹265.
Published on September 15, 2025
