Star Cement Limited: Q2 FY26 Sees Record Performance Amidst Strategic Expansion

Star Cement Limited, a prominent name in Eastern India's cement manufacturing sector, has reported a stellar performance for the second quarter of Fiscal Year 2026. The company's financial results underscore a period of robust growth and strategic advancements, setting a positive tone for its future trajectory. For Q2 FY26, Star Cement recorded its highest-ever EBITDA, Profit Before Tax (PBT), and Profit After Tax (PAT), reflecting strong operational efficiency and market demand.

The company's sales volume witnessed a significant 20% year-on-year growth, reaching 11.73 lakh tons. This surge in volume translated into a 26% increase in revenue from the sale of cement and clinker, totaling INR 811 crore. EBITDA for the quarter soared by an impressive 99% year-on-year to INR 194 crore, while PBT and PAT also saw substantial increases of 1121% and 1154% respectively, reaching INR 92 crore and INR 71 crore. These figures highlight Star Cement's ability to capitalize on market opportunities and optimize its cost structure, particularly through initiatives like the commissioning of its 12MW Waste Heat Recovery System (WHRS).

Strategic Expansion and Market Diversification

Star Cement is actively pursuing an aggressive expansion strategy, aiming to increase its cement capacity to approximately 10 MTPA by FY26. A key part of this plan involves the commissioning of the Silchar grinding unit in Assam by Q4 FY26, which will add 2 MTPA to its existing capacity. This project is expected to be operational by January of the next calendar year, further solidifying its presence in the Northeast.

In a significant strategic pivot, the company is re-prioritizing its expansion plans, deferring the Jorhat project to focus on a new 2 MTPA grinding unit in Bihar. This decision is driven by the attractive 300% SGST benefit offered by the Bihar state policy, which is expected to significantly enhance the project's viability and margins. The company has already begun acquiring land in Begusarai for this unit, targeting the central and eastern markets of Bihar. This move demonstrates management's agility in adapting to market realities and leveraging policy incentives for growth.

Beyond the East, Star Cement is also making a strategic entry into North India, with plans for a 4-5 MTPA grinding capacity in Rajasthan and Haryana. This includes a Nimbol Integrated Unit (2.8-3.3 MTPA clinker and 2-2.5 MTPA GU) and a Barwala Grinding Unit (2-2.5 MTPA GU). The company has secured substantial limestone reserves in Nimbol and Jaisalmer, laying the groundwork for long-term expansion in these high-growth markets. This geographical diversification is crucial for reducing regional concentration risks and tapping into new demand centers.

Operational Efficiencies and New Ventures

Operational efficiencies continue to be a cornerstone of Star Cement's strategy. The newly commissioned 12MW WHRS has stabilized and is now contributing 25% to the overall power mix, leading to significant cost savings. Furthermore, the company's new grinding unit in Guwahati achieved an impressive 83% utilization in Q2 FY26, indicating efficient ramp-up and strong demand absorption.

Star Cement is also venturing into new product categories to diversify its revenue streams and integrate forward. The company has launched a construction chemical segment and is actively expanding its AAC Block and other building materials portfolio. Management expects these new ventures, including AAC blocks, construction chemicals, and RMC, to contribute approximately INR 80-90 crore in revenue for the full year FY27. This move is aimed at creating futuristic products and strengthening its brand and distribution ecosystem.

Outlook and Management Confidence

Despite a temporary slowdown in September sales due to anticipated GST rate reductions, Star Cement's management remains confident about strong demand momentum in Q3 and beyond. The company projects a 12% volume growth for FY27 and aims to achieve 18-20 MTPA capacity by FY29-FY30. The ongoing infrastructure investments in the Northeast, particularly dam and hydro projects in Arunachal, are expected to be significant demand drivers once they commence full swing.

Star Cement's Q2 FY26 performance reflects a company that is not only achieving strong financial results but also strategically positioning itself for sustained long-term growth through disciplined capital allocation, geographical diversification, and a focus on operational excellence and new product development. The management's proactive approach to market changes and commitment to efficiency instills confidence in its future trajectory.