Emkay Global Financial has given Hold recommendation for Star Cement with a target price of Rs. 100 in its research report issued on May 18, 2022
Emkay Global Financial’s report on Star Cement
Star Cement’s Q4FY22 EBITDA increased 9% YoY/68% QoQ to Rs1.1bn, broadly in line with our and consensus estimates. EBITDA/ton declined 15% YoY to Rs983 (Emkay est.- Rs1,020). In FY22, FCF generation stood at Rs2.1bn post working capital release of Rs1.1bn and capex of Rs2bn. The company has concluded the buyback of 8.2mn shares (2% of share capital) at a price of Rs150/sh, totalling Rs1.2bn. Net cash stood at Rs5.4bn (15% of mcap) as of Mar’22.
Outlook
We broadly maintain our FY23-24 estimates with an unchanged TP of Rs100/sh. Our DCF-based TP implies a 1-year forward EV/EBITDA of 9x. Maintain Hold.