Star Cement reported mixed set of numbers for Q2FY19, significantly below consensus estimates on profitability fronts. The revenue for the quarter grew by 28.9% yoy to Rs362.3cr, in-line with estimates. However, raw material cost and other expenses were up significantly leading to 10.7% yoy decline in the EBITDA to Rs68.7cr (against estimate of ~Rs86cr). EBITDA margin, thus contracted by 842bps yoy to 19% against estimate of 24.1%. Due to sharp decline in interest and tax outgo, company reported PAT growth of 45.4% yoy to Rs38.2cr (despite EBITDA decline), however it was significantly below the estimate of ~Rs50cr.
Raw material cost was up by 549bps yoy as percent of net sales.
Also, on account of power and freight cost, there was rise in total other expense (up 363bps as percent of net sales and ~41% yoy jump in absolute numbers).
Interest cost declined significantly by 76.9% yoy.
Tax rate for the quarter was mere 2.1% against 15.7% in same quarter last year.
Star Cement Ltd is currently trading at Rs. 101.95, up by 0.95 points or 0.94% from its previous closing of Rs. 101 on the BSE.
The scrip opened at Rs. 101.60 and has touched a high and low of Rs. 103.30 and Rs. 97.80 respectively. So far 36,491 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.
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