Buy Star Cement; target of Rs 115: HDFC Securities

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HDFC Securities' research report on Star Cement

During 4QFY20, good demand in east/NE drove 4% vol growth despite Covid lockdown. Weak pricing however led to profit decline. Even in FY20, weak pricing pulled down profits despite higher utilisation, debt reduction and higher treasury gains. Healthy OCF topped large capex and investor pay-outs (buyback/dividends) and net cash balance doubled YoY.

Outlook

We maintain BUY on Star Cement with a TP of Rs 115. We continue to like Star for its leadership positioning in the lucrative NE region, which drives its industry leading op margin and healthy return ratios.

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