Star Cement Ltd's Q2FY19 consolidated net profit rises 45.4% yoy to Rs38.2cr : Misses Estimates

The company’s consolidated revenue stood at Rs362.3cr, up 28.9% yoy but down 30.1% qoq

Nov 12, 2018 03:11 IST India Infoline Research Team

Star Cement Ltd Q2FY19

Consolidated Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 362.3 28.9
EBITDA 68.7 [10.7]
EBITDA Margin (%) 19.0 [842]
Net Profit  38.2 45.4
***EBITDA margin change is bps
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.

Technical View:

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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