Star Cement Limited

Basic Materials — Building Materials · NSE

₹173.00+₹1.46 (+0.85%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by small-cap size, which brings sharper price swings, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

The 60-second version of Star Cement Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Star Cement Limited manufactures and supplies cement and clinker products in India and internationally. The company offers ordinary Portland, Portland pozzolana, and weather shield cement under the Star Cement brand.

IndustryBuilding Materials

SectorBasic Materials

Employees1,573

Annual revenue₹3,587 Cr

How does it make money?

Turns over ₹3,587 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹26 left at the operating level before interest, tax and depreciation. Each of its 1,573 employees supports ₹2.28 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.28 Cr

Who are its competitors?

The closest listed comparisons in its industry are ULTRATECH CEMENT LIMITED, GRASIM INDUSTRIES LTD, AMBUJA CEMENTS LTD, SHREE CEMENT LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE7.4%

What is the outlook?

13 analysts covering the stock expect revenue to grow about 10.3% and earnings to grow about 10.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+10.3%

Est. earnings growth+10.0%

Analysts13

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +39% while net margin moved +14% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+39%

Margin effect+14%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.02 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

68/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

78/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

18.9x

3Y Median

31.8x

40 monthly readings · mean 36.4x · range 17.7x–68.2x

Sector Median

36.2x

median of 4 sector peers

🟢Current valuation is approximately 40% below its 3y median of 31.8x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 48% below the peer median of 36.2x.

vs. its own history

Cheap

31.8x median over 40 months · -40%

vs. sector peers

Cheap

36.2x median of 4 peers · -48%

vs. generic bands

Fair

15x–35x

EV/EBITDA

8.0x

PEG

1.13

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 20.1% to 26.4% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 1607% over 3 years, from ₹35 Cr to ₹603 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 131% against revenue up 39% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 20.1% to 26.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 40% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 48% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹272 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 131% against revenue up 39%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 9% a year✓ 11.7% CAGR
Latest reported year was 3.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 24%✓ 26.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹272 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹6,992 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.9x

Fair

Fairly valued against the generic band

P/B Ratio

2.19x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹9.14

Profitable

Profitable on a per-share basis

ROE

12.3%

Moderate

Moderate capital efficiency

ROCE

15.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

3.4%

Modest

Modest growth

Profit Growth (YoY)

-24.2%

Falling

Profits are shrinking

Dividend Yield

1.16%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹272 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

17.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

10.9%

Average

Average margins

Net Margin

9.7%

Average

Average bottom-line conversion

Current Ratio

1.31

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.02

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

178.8 / 187.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

27.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,576 Cr	₹2,888 Cr	₹2,988 Cr	₹3,587 Cr	+11.7%
EBITDA	₹519 Cr	₹582 Cr	₹584 Cr	₹948 Cr	+22.3%
EBITDA Margin	20.1%	20.2%	19.5%	26.4%	—
PAT (Net Profit)	₹248 Cr	₹295 Cr	₹169 Cr	₹393 Cr	+16.7%
EPS	₹6.13	₹7.3	₹4.18	₹9.73	+16.6%
ROE	10.2%	10.9%	5.9%	12.3%	—
ROCE	15.9%	15.4%	7.9%	15.4%	—
Total Debt	₹35 Cr	₹147 Cr	₹403 Cr	₹603 Cr	+157.5%
Free Cash Flow	-₹213 Cr	-₹547 Cr	-₹285 Cr	₹272 Cr	—

🟢 Revenue has grown at 11.7% a year over 3 years.

🟢 EBITDA has grown at 22.3% a year over 3 years.

🟢 EBITDA Margin has risen from 20.1% to 26.4% over 3 years (+6.3 pts).

🟢 PAT (Net Profit) has grown at 16.7% a year over 3 years.

🟢 EPS has grown at 16.6% a year over 3 years.

🟢 ROE has risen from 10.2% to 12.3% over 3 years (+2.1 pts).

🟡 ROCE has held roughly flat at 15.4% over 3 years.

🔴 Total Debt has grown at 157.5% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹213 Cr to ₹272 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,647 Cr

Total Liabilities

₹1,459 Cr

Cash & Equivalents

₹13 Cr

Operating Cash Flow

₹765 Cr

Capex

-₹493 Cr

Shareholding (proxy)

Institutional Holding

4.3%

Insider Holding

90.4%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

12 Feb 2026

Analyst Consensus

Recommendations

11 Buy · 1 Hold · 1 Sell

Target Price (Mean)

₹250.46

+44.8% vs CMP

Target Range

₹167 – ₹325

Peer Comparison

Company	P/E	ROE
ULTRATECH CEMENT LIMITED	37.6x	11.1%
GRASIM INDUSTRIES LTD	34.8x	5.5%
AMBUJA CEMENTS LTD	20.4x	7.4%
SHREE CEMENT LIMITED	49.7x	7.0%

Recent News

2 mixed4 general

Caught Out By Star Cement's Fall? Here's What Bears Saw

Simply Wall Street, 14 Oct

Star Cement Share Price Near 52-Week Low Today

Univest, 13 Oct

Star Cement Shares In Focus As HDFC Securities Stays Bullish On Strong Growth Outlook — Check Target Price

NDTV Profit, 22 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Buy Star Cement; target of Rs 265: Anand Rathi

Moneycontrol.com, 13 Aug

Star Cement Share Price falls to yearly low: valuation view

Univest, 27 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Star Cement AGM passes all 12 resolutions including director re-appointments

scanx.trade, 25 Sept

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Valuation

MiddlingProfitability · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑