Synopsis: This Northeast cement leader, backed by India’s largest cement company, posted record FY26 earnings and is pursuing a ₹2,200 crore expansion across North India to fuel its next growth phase.
Cement maker ended FY26 with its strongest financial performance in recent years, more than doubling its full-year profit after tax to Rs 390 crores. The Northeast-focused cement maker – in which UltraTech Cement holds an 8.42% stake – is now setting its sights well beyond its home turf, with an ambitious multi-state greenfield expansion plan that could nearly double its cement capacity over the next four to five years.
A Record Year on Every Metric
Star Cement closed FY26 on a strong note across all financial parameters. Full-year revenue rose to Rs 3,776 crores from Rs 3,163 crores in FY25. EBITDA (excluding exceptional items) jumped to Rs 955 crores from Rs 589 crores, while profit after tax more than doubled to Rs 390 crores from Rs 169 crores. EBITDA per tonne for the full year stood at Rs 1,738, up sharply from Rs 1,245 in FY25.
The Q4 FY26 numbers were equally solid. Quarterly revenue came in at Rs 1,174 crores versus Rs 1,052 crores in the year-ago period. EBITDA for the quarter stood at Rs 324 crores against Rs 268 crores, and profit after tax rose to Rs 147 crores from Rs 123 crores. Per-tonne EBITDA for the quarter improved to Rs 1,871 from Rs 1,748.
Cement volumes for Q4 were 16.18 lakh tonnes, with 11.27 lakh tonnes sold in the Northeast and 4.91 lakh tonnes outside – primarily West Bengal and Bihar. The company hit the upper end of its FY26 volume guidance of 5.5 million tonnes.
Growth Target Set, But Q1 Faces Headwinds
For FY27, Star Cement has guided for 10% to 12% cement volume growth on the FY26 base of approximately 5.3 million tonnes. However, April demand came in softer than usual due to state elections in Assam and West Bengal. Management expects June to provide a clearer picture of how the full year shapes up.
Cost pressures have also emerged early in FY27. Coal rake shortages – with supply being diverted to thermal power plants – are pushing fuel costs higher, with the company estimating an increase of Rs 0.15 to Rs 0.20 per GCV in the near term. Overall, Star Cement expects a cost impact of roughly Rs 250 to Rs 300 per tonne in H1 FY27, primarily from packing costs and fuel sourcing.
Cement prices have been partially raised – about Rs 6 to Rs 7 per bag in the Northeast and Rs 10 per bag in North Bengal – to partially offset the pressure. Management expects cost conditions to normalize by Q3-Q4 FY27. The medium-term EBITDA per tonne guidance for Northeast operations remains Rs 1,500 to Rs 1,700.
The North India Bet
The most consequential story unfolding at Star Cement right now is its entry into North India. The company has laid out plans for five greenfield projects over the next four to five years. These include a 3.3 million tonne clinker plant in Nimbol, Rajasthan, a 2 to 2.5 million tonne grinding unit in Haryana backed by Rajasthan clinker, a 2 million tonne grinding unit in Bihar, a clinker plant in Umrangso, Assam, and a grinding unit in Jorhat, Assam. Together, these projects would take total cement capacity toward 9 million tonnes.
Capex for FY27 is now guided at Rs 600 to Rs 700 crores, revised upward from the earlier Rs 500 to Rs 600 crores estimate, with FY28 outlay pegged at Rs 1,500 crores. The Bihar and Rajasthan projects are targeted for commissioning in Q1-Q2 FY29. Bihar’s clinker supply will be routed from the Meghalaya plant via the Silchar railway siding.
Management has indicated that once the Rajasthan operations ramp up, blended EBITDA per tonne may moderate to Rs 1,300 to Rs 1,400 in the long run – though absolute EBITDA will be significantly higher given the volume jump.
Competition Knocking at the Northeast Door
Star Cement’s Northeast stronghold is drawing attention from mainland giants. Shree Cement, JK Lakshmi Cement, and Ambuja Cement have all announced plans to enter the region. Management acknowledged that competition will eventually exert some pricing pressure, but believes rational behaviour will prevail. Given the high capex involved – industry estimates suggest $160 to $180 per tonne for Northeast capacity – and the relatively small size of the market, aggressive price-cutting would hurt new entrants as much as incumbents.
Star Cement’s defence lies in its trade market share of 78%, the highest among all Northeast players by a significant margin, and a deeply entrenched distribution network built over two decades. Management believes it will take new entrants three to four years to meaningfully establish themselves in the region.
About the Company
Star Cement Limited is a Northeast-focused cement manufacturer headquartered in Kolkata, with clinker and cement plants primarily in Meghalaya. It sells cement across the Northeast as well as in West Bengal and Bihar. UltraTech Cement holds an 8.42% stake in the company. Star Cement is now expanding into North India through greenfield capacity additions in Rajasthan, Haryana, and Bihar, while also growing its AAC blocks and RMC business targeting Rs 150 crores in revenue in FY27.
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