Star Cement Stock Soars: Anand Rathi Unleashes 'BUY' Call with Rs 310 Target!

Anand Rathi's latest report comes with a strong endorsement for Star Cement, reiterating its 'Buy' recommendation and hiking the 12-month target price (TP) to Rs 310, an increase from the previous Rs 275. The core of the bullish outlook lies in Star Cement's ambitious expansion plans. The company aims to significantly scale up its cement production capacity, targeting a jump from the current 9.7 million tonnes per annum (tpa) to a substantial 18-20 million tpa by the financial year 2030 (FY30).

Several factors are expected to drive this growth and enhance profitability. The report points to greater operational efficiencies being achieved through a stabilized clinker unit and the benefits derived from new capacity commissioning. A key strategic initiative is the company's increasing reliance on green energy, with a target to source 55-60% of its energy needs from renewable sources, which is anticipated to positively impact operating performance. Furthermore, Star Cement is managing its expansion prudently, guiding that its peak debt to EBITDA ratio will remain manageable at 1.5x.

Impact This news is bullish for Star Cement's stock. An analyst's 'Buy' rating combined with a raised price target and concrete expansion plans, coupled with efficiency and sustainability initiatives, generally boosts investor confidence and can lead to positive stock performance. The focus on controlled debt also suggests financial stability amidst growth. Rating: 7/10

Difficult terms: * **tpa**: Tonnes per annum, a measure of production capacity or output over one year. * **FY30**: Financial Year 2030, referring to the fiscal year ending on March 31, 2030. * **clinker unit**: A facility that produces clinker, a key intermediate material in cement manufacturing. * **operating performance**: The profitability and efficiency of a company's core business operations. * **green energy**: Energy derived from renewable sources like solar, wind, or hydro, which have minimal environmental impact. * **debt/EBITDA**: A financial ratio assessing a company's ability to pay off its debt using its earnings before interest, taxes, depreciation, and amortization. A lower ratio indicates lower leverage. * **EV/EBITDA**: Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a valuation multiple used to compare companies. * **TP**: Target Price, the future price level an analyst forecasts for a stock.