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Star Cement Ltd

NSE: STARCEMENT BSE: 540575

214.21

(-0.99%)

Tue, 03 Mar 2026, 03:03 pm

Star Cement Analysis

dividend

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Pros

  • Dividends after 3 years are expected to be well covered by earnings (4.3x coverage).
  • Star Cement's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.75%).
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Cons

  • Star Cement has only been paying a dividend for 2 years, and since then there has been no growth.
  • Star Cement has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).
  • Star Cement's dividend is below the markets top 25% of dividend payers in India (3.09%).

future

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Pros

  • Performance (ROE) is expected to be above the current IN Basic Materials industry average.
  • Star Cement's revenue growth is expected to exceed the India market average.
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Cons

  • Cash flow for Star Cement is expected to decrease over the next 2 years.
  • Star Cement's earnings are expected to grow by 0.8% yearly, however this is not considered high growth (20% yearly).
  • Star Cement's earnings growth is positive but not above the India market average.
  • Star Cement's earnings growth is positive but not above the low risk savings rate of 7.2%.
  • Star Cement's earnings are expected to decrease over the next year.
  • Star Cement's net income is expected to increase but not above the 50% threshold in 2 years time.
  • Star Cement is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
  • A decline in Star Cement's performance (ROE) is expected over the next 3 years.
  • Star Cement's revenue is expected to increase but not above the 50% threshold in 2 years time.
  • Star Cement's revenue is expected to grow by 7.3% yearly, however this is not considered high growth (20% yearly).

health

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Pros

  • Star Cement is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Star Cement is profitable, therefore cash runway is not a concern.
  • Star Cement is profitable, therefore cash runway is not a concern.
  • Debt is well covered by operating cash flow (2363.4%, greater than 20% of total debt).
  • Debt is covered by short term assets, assets are 47.9x debt.
  • Star Cement's cash and other short term assets cover its long term commitments.
  • The level of debt compared to net worth has been reduced over the past 5 years (94.9% vs 1.2% today).
  • Interest payments on debt are well covered by earnings (EBIT is 92.7x coverage).
  • Star Cement's level of debt (1.2%) compared to net worth is satisfactory (less than 40%).
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Cons

  • High level of physical assets or inventory.

management

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Pros

  • The tenure for the Star Cement board of directors is about average.
  • Sanjay's remuneration is lower than average for companies of similar size in India.
  • Sanjay's compensation has been consistent with company performance over the past year, both up more than 20%.
  • More shares have been bought than sold by Star Cement individual insiders in the past 3 months.
  • The tenure for the Star Cement management team is about average.
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Cons

    past

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    Pros

    • Star Cement has delivered over 20% year on year earnings growth in the past 5 years.
    • Star Cement used its assets more efficiently than the IN Basic Materials industry average last year based on Return on Assets.
    • Star Cement has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
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    Cons

    • Star Cement's 1-year earnings growth is negative, it can't be compared to the 5-year average.
    • Star Cement has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
    • Star Cement's 1-year earnings growth is negative, it can't be compared to the IN Basic Materials industry average.

    value

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    Pros

    • BSE:540575 is up 19.9% outperforming the Basic Materials industry which returned 10.9% over the past month.
    • BSE:540575 is up 19.9% outperforming the market in India which returned 9% over the past month.
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    Cons

    • Star Cement's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
    • Star Cement's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
    • Star Cement is overvalued based on assets compared to the IN Basic Materials industry average.
    • Star Cement is poor value based on expected growth next year.
    • Star Cement is overvalued based on earnings compared to the IN Basic Materials industry average.
    • Star Cement is overvalued based on earnings compared to the India market.
    • 540575 underperformed the Basic Materials industry which returned -16% over the past year.
    • 540575 underperformed the Market in India which returned -14.8% over the past year.

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