ICICI Direct is bullish on Star Ferro & Cement; has recommended buy rating on the stock with a target price of Rs 132 in its research report dated August 05, 2016.
Star Ferro & Cement’s Q1FY17 results were below our estimates. SFCL’s revenues increased 9.9% YoY to Rs 449.1 crore (below I-direct estimate of Rs 541.7 crore) led by 22.4% YoY increase in volumes to 0.76 MT while realisation declined 10.2% YoY to Rs 5,94.
Star Ferro and Cement reported weak set of first quarter numbers where its net profit fell 43 percent to Rs 23.60 crore year-on-year (YoY) and its operating profit margin shrunk 9.3 percentage point to 20.4 percent (YoY). In an interview with CNBC-TV18, Sanjay Gupta, CEO of Star Ferro said that the total price drop in the first quarter was around Rs 20-25 per bag for the northeast.
Till recently, the North-Eastern region was known for importing cement from the mainland to meet its demands. Of late, with cement companies making a beeline to put up plants in the region, North-East is fast transforming into a cement export hub for the mainland. With the commissioning of Star Cement’s green-filed plant at Sonapur, near Guwahati, the company now eyes the eastern market, particularly North Bengal and Bihar.