Axis Securities has issued a BUY recommendation for Star Cement Ltd, citing robust capacity expansion and strong market positioning in the Northeast and Eastern regions. The investment rationale underscores rising cement demand, impressive growth forecasts, and financial outperformance, as well as prudent risk assessments. Investors are advised to watch Rs 261 as the prevailing market price, with a target of Rs 288 in the medium term, presenting an approximate upside of 10% over the next three to six months. This summary encapsulates the firm’s conviction in Star Cement as a promising medium-term opportunity in India’s evolving cement landscape.

Axis Securities' Conviction: BUY on Star Cement Ltd

Axis Securities, under its Axis PUNCH series, advocates a BUY call on Star Cement Ltd, propelled by an attractive medium-term earnings profile and pivotal expansion plans. The house notes Star Cement’s capital-efficient growth approach and its dominant 27% share in the Northeast, making it a strategic pick amid accelerating infrastructure-led demand.

Strategic Capacity Expansion to Cement Growth

The report highlights the successful ramp-up of the Guwahati 2 MTPA Grinding Unit and anticipates the Silchar facility to be operational by Q4 FY26. With these upgrades, total grinding capacity will leap from 7.7 MTPA to 9.7 MTPA. This ambitious expansion underpins a projected volume CAGR of 12% through FY25-27, providing the backbone for Star Cement’s market leadership.

Market Opportunity: Eastern and Northeast India Booming

Cement demand in Eastern and Northeastern India is poised for healthy growth, underwritten by government infrastructure push and sustained housing initiatives. Axis Securities pegs the Eastern region’s demand growth at 8–9% CAGR through FY28, while the Northeast’s historical CAGR of 7.5–8.5% is set to accelerate with new infrastructure projects and urbanization trends.

Forecast: Financial Outperformance and Margin Expansion

Star Cement’s Q2 FY26 performance is projected to be remarkable, with revenue, EBITDA, and PAT expected to grow by 15%, 76%, and 825% year-over-year, respectively. The EBITDA margin, forecast at 21% versus 15% in the prior year, is a testament to disciplined cost management, higher volumes, and improved pricing power in its regional markets.

Valuation: Attractive Upside with Conservative Risk Profile

The stock, as per current trading multiples, is valued at 12.5x and 11.5x FY26E/FY27E EV/EBITDA, rendering it an attractive entry point for mid-term investors. The research firm projects that SCL will register a volume and revenue CAGR of 12–16%, with EBITDA and PAT compounding at 31–52% over FY25–FY27. Investors can anticipate a price appreciation to Rs 288 from the current Rs 261, representing a 10% upside potential over 3–6 months.

Company at a Glance: Star Cement’s Regional Edge

Star Cement Ltd stands as the largest manufacturer in the Northeast, with an established portfolio spanning manufacturing and sales across Eastern and Northeastern states. A 7.7 mtpa installed grinding capacity and a commanding market share solidify the company’s moat. Star’s growth narrative is intricately tied to regional dynamics and its ability to orchestrate capacity-led advances.

Key Financials: Growth Trajectory

Below is the consolidated financial outlook, capturing the evolving growth story:

Investment Risks: What Could Go Wrong?

Key risks flagged include potential dips in cement prices, sluggish demand, and higher input costs that could pressure EBITDA margins. While these variables warrant attention, Star Cement’s disciplined approach and cost controls mitigate the near-term threat to investor returns.

Trading Levels and Investor Actionables

- CMP (as of October 7, 2025): Rs 261
- Target Price: Rs 288
- Expected Upside: 10%
- Investment Duration: 3–6 months
- 52-week High/Low: Rs 309/Rs 172 Investors seeking tactical medium-term allocations in India’s infrastructure growth story can consider accumulating Star Cement near current levels, with a disciplined target and a close watch on the aforementioned risks.