Star Cement Q1 FY27 Results (NSE: STARCEMENT)
Signal: Margin pressure
The read
The key inflection is a reversal from five consecutive quarters of margin expansion: Q1FY27 revenue grew only 3.4% YoY to ₹94,288.89 lakh while gross margin compressed 481bps and EBITDA margin fell 338bps to 21.6%; consolidated PAT declined 24.1% to ₹7,471.66 lakh, with higher raw-material intensity and finance costs outweighing modest revenue growth.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹942.89 Cr | +3.4% | -19.7% |
| Net profit | ₹74.72 Cr | -24.1% | |
| EPS | ₹1.85 | -24.2% | |
| EBIT margin | 21.6% |
P&L walk
Consolidated revenue increased to ₹94,288.89 lakh, +3.4% YoY, but gross margin compressed 481bps to 83.2% as raw-material and inventory-related costs rose to 16.9% of revenue from 12.0%; EBITDA margin consequently fell 338bps to 21.6%, while PAT attributable to shareholders declined 24.1% to ₹7,471.66 lakh.
Key positives
- Consolidated revenue increased 3.4% YoY to ₹94,288.89 lakh despite EBITDA margin falling to 21.6%, and non-material operating expenses grew only 2.8% YoY.
- Power and fuel expense declined 7.3% YoY to ₹9,141.93 lakh, or 9.7% of revenue versus 10.8% in the year-ago quarter.
- EPS declined 24.2% YoY to ₹1.85, broadly tracking the 24.1% decline in shareholder PAT, indicating no material dilution signal.
- The group added Jaitaran Renewable Power Private Limited and Nitesh Minerals Private Limited during the quarter, expanding the consolidated asset and operating base.
Key concerns
- Gross margin compressed 481bps YoY to 83.2% as raw-material and inventory-related costs rose to 16.9% of revenue from 11.9%; with revenue growing, the company appears to have absorbed the cost pressure.
- Implied EBITDA declined 10.4% YoY to ₹20,448.56 lakh despite 3.4% revenue growth, and EBITDA margin fell 338bps to 21.6%, ending the prior margin-expansion streak.
- Finance costs increased 35.4% YoY to ₹1,375.46 lakh, further reducing conversion of operating profit into PAT.
- Consolidated PAT attributable to shareholders fell 24.1% YoY to ₹7,471.66 lakh, while standalone PAT was ₹2,375.65 lakh, highlighting the importance of subsidiary performance to group earnings.
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