The credit rating agency has reaffirmed its 'CRISIL AA/Stable’ rating on the long-term bank facilities of the company.
CRISIL said that the rating continues to reflect CRISIL Ratings’ belief that the company’s market leadership in north-east India will strengthen further in the near term with commissioning of 3 MTPA clinker and 2 MTPA grinding unit by end of current fiscal.
This will enable additional sales volumes along with sustained healthy operating profitability and robust financial risk profile thereby improving its overall credit profile. The successful commissioning of these facilities and their timely stabilization & ramp-up would be a key monitorable.
The ratings factors strong brand recall of the company in the north-east region along with the robust profitability.
These strengths are partially offset by susceptibility to volatility in input prices, the commoditised nature of the product and exposure to risks associated with the sizeable, ongoing capital expenditure (capex).
Star Cement has a combined cement manufacturing capacity of 5.70 MTPA, clinker manufacturing capacity of 2.80 MTPA, 12.3 MW waste heat recovery system (WHRS) and a captive power plant with capacity of 51 MW as of December 31, 2023.
For the nine months ended 31 December 2023, SCL reported profit after tax (PAT) of Rs 207.4 crore and operating income of Rs 1,997.1 crore, against Rs 151.5 crore and Rs 1875.7 crore, respectively, for the corresponding period of the previous fiscal.
The scrip rose 0.96% to currently trade at Rs 210 on the BSE.