Star Cement Limited has informed the Exchange about Investor Presentation for the Second Quarter ended 30th September, 2022
Date: 25th November, 2022
To The Listing Department, National Stock Exchange of India Limited Exchange Plaza, C-1, Block-G Bandra Kurla complex, Bandra-East Mumbai-400 051 Stock code: STARCEMENT
To BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai-400 001 Stock code: 540575
Dear Sir,
Subject: Investor Presentation for the Second Quarter ended 30th September, 2022
Pursuant to the Regulation 30 of Securities and Exchange Board of India (Listing obligations and Disclosures Requirements) Regulation, 2015, an Investor Presentation for the second quarter ended 30th September, 2022 has been prepared and the same has been disseminated on the Company’s website at https://www.starcement.co.in/investor/investors-presentation. We are enclosing herewith a copy of the Presentation for your information and record.
Request you to kindly take this communication on record.
Thanking you,
Yours faithfully, For Star Cement Limited
25-11-2022
X
D eb a b ra ta Th a k u rta C o mp a n y Secreta ry Sig n ed b y: D E BABR ATA TH AKU R TA
Debabrata Thakurta
(Company Secretary)
Encl. as stated
CREATING A BETTER TOMORROW
STAR CEMENT LIMITED An Integrated Cement Company
NSE Ticker: STARCEMENT | BSE Ticker: 540575 | Bloomberg Ticker: STRCEM:IN
Q2 Presentation | September 2022
INDEX
KNOW US BETTER: CORPORATE OVERVIEW
BETTER PROSPECTS & POSSIBILITIES: INDIAN CEMENT INDUSTRY
WHAT MAKES US BETTER: STRENGTHS & STRATEGIES
PROMISING A BETTER TOMORROW: SUSTAINABILITY
LEADING FROM THE FRONT: OUR MANAGEMENT TEAM
NUMBERS THAT SPEAK FOR US: FINANCIAL PERFORMANCE REVIEW
APPENDIX:
2
KNOW US BETTER
CORPORATE OVERVIEW
3
STAR CEMENT AT A GLANCE
As one of the most renowned and leading names among Eastern India's cement manufacturers, Star Cement enjoys a strong brand recall. The Company caters to significant cement markets across the region and functions across its six manufacturing units spread in the Eastern India region.
5.7 MTPA
AGGREGATE CEMENT CAPACITY
2.8 MTPA
AGGREGATE CLINKER CAPACITY
1,600+
12,000+
TOTAL DEALER NETWORK
TOTAL RETAILER NETWORK
3,100+
WORKFORCE
ZERO DEBT
COMPANY
SALES MIX
Non Trade Sales 11%
HIGHEST
MARKET SHARE IN NORTH- EASTERN REGION
ONE OF THE COUNTRY'S FINEST LIMESTONE RESERVES
Trade Sales 89%
OUR STAR PRODUCTS
ORDINARY PORTLAND CEMENT (OPC)
PORTLAND POZZOLANA CEMENT (PPC)
ANTI RUST CEMENT (ARC)
OPC 43: Suitable for construction where the grade of concrete is upto M-30. OPC 53: Provides high strength and durability to structures with optimum particle size crystallized distribution and superior structure.
PPC: Ideal for:
Mass concreting works Masonry mortars and plastering It is resistant to chemical attacks, more durable, improves strength and viscosity, has lower permeability, is water-resistant, and has better cohesiveness.
ARC: A highlight of Star Cement’s innovative line and a robust R&D, ARC product anti-corrosive anti-rust imparts properties in the reinforcing bars for higher durability and service life of the structure.
and
A JOURNEY THAT SPEAKS OF EXPANSION
Our growth is reflected in how our manufacturing capacities have expanded through the years. Here is a year-wise snapshot summarizing our progress and additions to our cement and clinker capacities.
CLINKER (MMT)
CEMENT (MMT)
0.40
0.60
0.80
2.60
2.80
FY 04-05
FY 07-08
FY 10-11
FY 12-13
FY 15-16
FY 16-17
FY 18-19
FY 20-21
0.40
1.06
1.27
3.00
3.70
4.30
5.70
BETTER PROSPECTS & POSSIBILITIES
INDIAN CEMENT INDUSTRY
7
7
INDIAN CEMENT INDUSTRY’S PROMINENCE & OPPORTUNITIES
Adani Group entry may drive higher consolidation
Housing to drive consumption
Adani Group completed one of the largest cement acquisition in India with the acquisition of ACEM and ACC in September 2022. The entry of the large and aggressive Adani Group will bring more discipline in the sector.
Housing construction momentum continues to remain consistent. The number of houses completed under PMAY - Grameen scheme and PMAY - Urban scheme has grown consistently, yet it still falls short of the Ministry of Rural Development's target of 50 million. Under Union Budget 2022-23, the government allocated INR 480 billion for the construction of 80 lakh houses for both PMAY - Urban scheme and PMAY – Grameen scheme.
India's consumption much lower versus global counterparts
Per capita cement consumption for India has only increased by 5% over the last 20 years and remains one of the lowest in the world. Given increasing trend of rapid urbanization and nuclearization of families, housing demand may remain strong over next few years.
Real estate inventory overhang seems to have declined sharply
The real estate absorption hits 10-year high levels on pan-India basis in 2021 and sales for 1H2022 have been stronger. Stable prices and improved affordability have led to robust demand. The uptrend in absorption is seen across regions and is not exclusive to a few cities. Inventory has thus hit a 10-year low. New launches are starting to improve and could lead to better cement demand in coming time.
Road construction at 8% CAGR for last 10 years
The Indian government remains focused on improving the country's road infrastructure. Construction of roads have grown at a steady pace of ~8% CAGR since the current government took over in 2014 and at a CAGR of 7% for the last 10 years. In a bid to accelerate rural road construction, budgetary allocation to Pradhan Mantri Gram Sadak Yojana (PMGSY) in 2022 was raised by 36% to INR 190 bn.
Source: extracts from Research report - Antique Stock Broking Limited
BURGEONING EASTERN INDIA
REGIONWISE PER CAPITA CEMENT CONSUMPTION
400
300
200
100
-
North
South
East
West
Central
North has the highest consumption of cement, while east the lowest
Utilization in East India to stay around 80% during till FY25
FY21
FY22
FY23E
FY24E
FY25E
Installed Capacity (Lakh Tons)
100
110
Effective Capacity (Lakh Tons)
Production (Lakh Tons)
Utilisation (%)
91
80
88
94
79
76
121
112
88
79
128
121
97
81
144
132
103
78
Source: Research report - Antique Stock Broking Limited
OPPORTUNITIES IN THE EASTERN REGION
Although the cement consumption in the Eastern region is lower than the national average, the market is likely to witness positive change in near future. Thereby, leading to a higher contribution by the eastern market to domestic scale of production.
Given below are some of the growth factors:
21.6 Mn units of housing shortage in Eastern India.
Higher focus on national security in the Eastern region of the Government initiating large pipeline of infrastructure projects.
Special focus on smart cities in Eastern region – with 21 out of 110 cities being selected under Smart City Mission.
Limestone availability in the north east region – the key raw material for cement manufacturing makes it an attractive destination.
The Government of India is implementing various rail, road and air connectivity projects worth INR 1,34,200 crore in North-East India, which include 20 railway projects worth INR 74,000 crore for 2,011 km, 4,000 km of roads in the region at a total cost of INR 58,000 crore & 15 ongoing air connectivity projects, costing around INR 2,200 crore.
WHAT MAKES US BETTER
STRENGTHS & STRATEGIES
10
1010
STRENGTHENING OUR TOMORROW
OUR CURRENT MANUFACTURING CAPABILITIES
OUR CURRENT MANUFACTURING UNITS & CAPEX PLAN
2.8 MTPA CLINKER PRODUCTION CAPACITY
5.7 MTPA CEMENT PRODUCTION CAPACITY
51 MW POWER PRODUCTION CAPACITY
6 MANUFACTURING UNITS
LARGEST MANUFACTURER OF CEMENT IN NORTH- EAST INDIA
OUR LONG-TERM PLANS
NEXT FIVE-YEAR PLANS:
Setting up a 3 MT clinker unit with 12 MW WHRB at Lumshnong: ₹ 1,300 Crores
Setting up a 12 MW WHRB at Lumshnong: ₹ 150 Crores
Setting up two grinding units in Assam: ₹ 800 Crores
1 Grinding unit at Siliguri, West Bengal
1 Grinding unit at Guwahati, Assam
Setting up 2 grinding units in Assam
4 manufacturing units at Lumshnong, Meghalaya
Setting up 3 MT Clinker unit and 12 MW WHRB at Lumshnong
BRANDING & PROMOTION: ENDORSING A BETTER TOMORROW
ANNUAL ADVERTISING & BRAND PROMOTION INVESTMENT
AKSHAY KUMAR, AS OUR BRAND AMBASSADOR, BOOSTED OUR BRAND VISIBILITY
ADVERTISEMENT AND BRANDING EXPENSES (₹ IN CR)
51.82
29.00
35.30
21.90
16.82
FY19
FY20
FY21
FY22
HY1 FY23
₹ 5.06 Crores
Invested in branding and advertisement in the Q2 FY 22-23
Continued with focused advertisement and enhanced brand visibility through ATL & BTL activity.
During the year Star Cement Ltd. continued with the Brand Television Commercial with Akshay Kumar as brand Ambassador, one of the biggest Stars of Bollywood.
Association of Akshay Kumar being the brand ambassador caused an uplift on the brand perceptions and has had a positive impact on the saliency of Star Cement as a brand.
Awards Received • SCALE 2019, 2020 & 2021 (Supply Chain & Logistics Excellence) • Rotary RMB Connect 2021 award with Economic Times for invaluable service &
excellence in Cement Industry category.
ADVANCING WITH TECHNOLOGY
STAR LOTUS APP (5600+ USERS): with Assisting classification, gift distribution, and journey, for bettering their experience with Star Cement.
contractors site
verification,
STAR STELLAR APP (2300+ USERS): Facilitating loyalty program for civil engineers and providing login facility to Technical Civil Employees Engineers for a better performance at work
and
STAR SAATHI APP FOR DEALERS (1800+ USERS): of channels the Strengthening distribution, the app facilitated flexibility in placement tracking and payment, providing ease of service to our dealers
SALES FORCE AUTOMATION APP: Helping us to track attendance, and various other activities taking place (including field visits by our Sales, Branding and Technical Teams
DIGITAL DISPLAYS: Impacting our in-store branding to enhance brand information and visibility along with timely updates on relevant schemes and offers.
CUSTOMER WEB-PORTAL: Aiding dealers in generation of ledgers, notes debit invoices, through OTP authentication.
note/credit
IMPLEMENTED ENTERPRISE RESOURCE MANAGEMENT (ERM) SYSTEMS: Leading to higher operational efficiency and an overall enhanced performance (includes management of inventory and sales)
WIDER REACH FOR A BETTER TOMORROW
STRONG SUPPLY CHAIN & DISTRIBUTION NETWORK We emphasize on strengthening being among the first one to identify the disparity in demand and supply forces, through a strong supply chain & distribution network:
EASY AVAILABILITY OF RAW MATERIAL: Easy access and proximate location to limestone mines within 2-3 km of our plants in Integrated vehicle logistics system.
RIGHT MIX OF DISPATCH MODES: Availability of different modes of transportation, including roadways and railways for uninterrupted supply
IMPROVING RAIL TRANSPORT CONNECTIVITY: Raw Material Inward & Cement outward dispatches from Siliguri siding ensured alternate mode availability for enhanced serviceability and Cost Efficiency.
ENHANCING PRODUCTIVITY THROUGH OWN FLEET: Optimum utilization of owned fleet of 190+ trucks through digitization enabled the organization to increase the overall efficiency & productivity
ESTABLISHED DEALER-DISTRIBUTOR NETWORK: Our extensive distribution network helps deepen penetration in the Eastern region
DISTRIBUTION NETWORK SPREAD ACROSS 10 STATES, LEADING TO AN EDGE OVER PEERS
DEALER NETWORK
1041
1126
1050
677
551
978
1056
1047
1048
1088
FY 18-19
FY 19-20
FY 20-21
FY 21-22 HY1 FY 21-23
North-east
Rest of East India
THE STAR SHINES BRIGHT AND STRONG
• Enjoys a leadership position in the North East with market share of more than 23%
• Gradually increasing share in the Eastern region through concerted efforts
• Strong dealer and distributor network built over the years, steering year-on-year growth, enabling leadership position in
DISTRIBUTION NETWORK SPREAD ACROSS 10 STATES, LEADING TO AN EDGE OVER PEERS
market
33%
52%
PRODUCTION THROUGH THE YEARS – VOLUME (LAKH TONS)
28%
21%
4%
13%
6%
-12%
-8%
36%
10.7
16.3
21.7
26.3
27.4
24
27.1
28.8
26.5
33.9
13.78
18.71
FY 12-13
FY 13-14
FY 14-15
FY 15-16
FY 16-17
FY 17-18
FY 18-19
FY 19-20
FY 20-21
FY 21-22
HY1 FY 21-22
HY1 FY 22-23
PROMISING A BETTER TOMORROW
ENVIRONMENT, SOCIAL & GOVERNANCE
BEING RESPONSIBLE TODAY FOR A BETTER TOMORROW
Health and Sanitation
Livelihood Development
Education
Rural Development
•
•
•
• •
of
garbage
different
from Collection Lumshnong, Tongseng and Umsahi village under waste management project Two ambulances were handed over to organizations civil like NYAM, of Nongbah village and HYC ( NGO) of Jaintia Hills. Establishment of STAR JALADHARA Project- 24 x 7 running potable water system education social institutes. Renovation of Institutional Toilets. Food Security for 60 specially abled persons of Mohitnagar Eye camp was collaboration with conducted Presbyterian Church of Lumshnong at Umtyra village.
and in
and
• Medical
•
•
•
•
Graduates from Star USHA Tailoring School tailoring supported with machine are now stitching outfits and uniforms from different agencies Beautician and wellness courses started. Second phase of biofloc fish farming underway. Production ongoing at Agarbatti unit and sanitary napkin production unit at SRIJANI.
training
• Mega
2022
(Adivasi
campaign
awareness
awareness
on about increasing menstrual hygiene arranged on 9th August, Divas) Livelihood hub at Lumshnong is under construction. 10 new piglets introduced to the pig rearing project of Lumshnong. The Broom making project is going on in Brichrnyot village.
•
•
•
•
•
•
Star
Scholarship
award The distributed on 12th August 2022, to 56 students received along with 18 students from Lumshnong. Computer Book launched at NEDFI auditorium on 4th July 2022 under gracious presence of Smt. Mrinalini Devi, VP – Assam Sahitya Sabha. Anglo–Assamese dictionaries also distributed among the students. Khliehriat East LP & UP School inaugurated and handed over on 29th July 2022 under gracious presence of Deputy Commissioner of East Jaintia Hills Students from Star Public School participated in five days educational tour Assam in September.
Sivsagar,
to
•
•
•
•
•
•
•
of
Lumshnong
as per SCML
Construction of 600 meter road at Dongwalarung locality of Lumshnong Village underway. Construction Community Hall office underway. Solar home lighting system installed in Meghalaya which became a life saver for the community. local 20 shops, compliance (new) and 12 shops, as per SCL local compliance had been handed over to Dorbarshnong of Lumshnong on 3rd August 2022. New set of PA system installed in the community hall of Lumshnong. Foundation for laid stone construction & renovation of Gandhi Nagar Anchalik Kalabikash Kendra. 6000 flags distributed among local "Har Ghar Tiranga" people under programme of Govt. of India
LEADING FROM THE FRONT
OUR MANAGEMENT TEAM
GOOD GOVERNANCE PROMISING A BETTER TOMORROW
OUR PROMOTERS TEAM
Mr. Sajjan Bhajanka Chairman Director
& Managing
50
Experience: years’ plywood, in experience laminates, ferro alloys and cement industry
Mr. Rajendra Chamaria Vice Chairman & Managing Director
in
36 cement
Experience: years’ and experience concrete sleepers industry with excellent project execution skill and production knowledge
Mr. Sanjay Agarwal Managing Director
Experience: 36 industry experience
years’
Mr. Prem Kumar Bhajanka Managing Director
Experience: 43 years of industry experience
Mr. Tushar Bhajanka Executive Director
Qualification: MPhil in Economics from the University of Cambridge
Experience: 4 years’ industry experience
GOOD GOVERNANCE PROMISING A BETTER TOMORROW
OUR MANAGEMENT TEAM
Mr. Pankaj Kejriwal Chief Operating Officer
Qualification: Chemical Engineer
Experience: 22 years’ overall experience
Mr. Pradeep Purohit Chief Strategy Officer
Qualification: B. Com, Graduate Dip. IIMM
Experience: 34+ years in the cement and engineering industry
Mr. Manoj Agarwal Chief Financial Officer
Qualification: Accountant, Company Secretary
L.L.B, Chartered
years’ Over Experience: experience, including 15 years in the cement industry
27
Mr. Sundaram Srinivasan Chief Manufacturing Officer
Qualification: Engineer
Mechanical
Experience: More than 3 decades in the cement industry including companies like Gujarat Ambuja Cement & Zuari Cement.
Mr. Jyoti S. Agarwal Chief Marketing Officer
Qualification: M.Com
39
Experience: years’ Over experience in the cement industry, having worked at senior positions in Aditya Birla Group and Ambuja Cement Limited
Mr. Samar Banerjee Chief Human Resource Officer
Qualification: BA( Eco), PGPM&IR
Over
years’ 27 Experience: experience, including 14 years in the cement and Building Material Industries.
NUMBERS THAT SPEAK FOR US
FINANCIAL HIGHLIGHTS
21
212121
OPERATIONAL AND FINANCIAL UPDATES
Operational
• The total cement production in Q2 FY23 was 8,90,721 MT against 6,17,852 MT in Q2 FY22, a YoY increase of 44%.
• Average capacity utilization of cement grinding units was 63% in Q2 FY23.
• Cement sales in Q2 FY23 was up by 46% (YoY) to INR 592 Cr.
Financial
•
EBITDA for the quarter stood at INR 83 Cr, significantly impacted by rise in fuel cost and shutdown of plant.
• Profit After Tax for the quarter stood at INR 31 Cr.
•
The organisation has completed the adoption of SAP across all levels.
• WHRS project at Lumshnong is progressing well and is expected to start generating power from December 2022
Functional
•
•
The organisation is in process to introduce the use of alternate fuel resources in its Kiln. The organisation is also
optimizing the use of biomass in power generation.
The organisation is optimizing utilization of owned fleet through digitization enabling the organization to increase the
overall efficiency & productivity.
HIGHLIGHTS THAT MATTER
SALES VOLUME - CEMENT (MILLION TONS)
REVENUE FROM CEMENT SALES (INR CR)
EBITDA (INR CR)
PAT (INR CR)
44%
46%
4%
-34%
0.62
0.89
405
592
80
83
47
31
Quarter ending Sep 2021
Quarter ending Sep 2022
Quarter ending Sep 2021
Quarter ending Sep 2022
Quarter ending Sep 2021
Quarter ending Sep 2022
Quarter ending Sep 2021
Quarter ending Sep 2022
Robust increase in sales volume by 44%
Increase in sales volume primarily contributed to the in revenue from cement sales by 46%
increase
EBITDA was largely impacted by rise in power and fuel cost, and annual shutdown of plant.
PAT for the period decreased by almost 34% as compared to the same period last year. The same is a result of sunset of tax exemption under section 80IE for the group.
APPENDIX
STANDALONE FINANCIAL HIGHLIGHTS
PARTICULARS
Equity Share Capital
Reserves & Surplus
Net Worth
Revenue
EBIDTA
PBT
Tax Expenses
PAT
Return on Equity (Annualised)
Earning Per Share (Not Annualised)
Q2 FY23
Q2 FY22
Q1 FY23
FY22
INR Cr
INR Cr
INR Cr
INR Cr
INR Cr
INR Cr
INR Cr
INR Cr
%
INR
40
1,324
1,364
604
59
37
141
24
6.9%
0.58
41
1311
1352
415
42
21
(2)
23
6.8%
0.56
40
1,300
1,340
667
86
23
231
41
12.33%
1.02
40
1,259
1,299
2,219
255
170
(6)
176
13.6%
4.36
1The tax holiday period enjoyed by the company’s Guwahati Grinding Unit u/s 80 IE of Income Tax Act, 1961 has ended in the financial year 2021- 2022 leading to an overall increase in the company’s tax expenditure.
CONSOLIDATED FINANCIAL HIGHLIGHTS
PARTICULARS
Equity Share Capital
Reserves & Surplus
Net Worth
Revenue
EBIDTA
PBT
Tax Expenses
PAT
Return on Equity (Annualised)
Earning Per Share (Not Annualised)
Q2 FY23
Q2 FY22
Q1 FY23
FY22
INR Cr
INR Cr
INR Cr
INR Cr
INR Cr
INR Cr
INR Cr
INR Cr
%
INR
40
2,226
2,267
608
83
49
181
31
5.5%
0.77
41
2,149
2,190
415
80
44
(2)
46
8.5%
1.13
40
2,196
2,236
680
138
105
381
67
12.1%
1.67
40
2,128
2,168
2,255
379
244
(3)
247
11.4%
6.04
1The tax holiday period enjoyed by the company’s Guwahati Grinding Unit and its subsidiary, Star Cement Meghalaya Limited (SCML) u/s 80 IE of Income Tax Act, 1961 has ended in the financial year 2021-2022 leading to an overall increase in the Group’s tax expenditure.
SAFE HARBOUR
This quarterly investor presentation has been prepared by Star Cement Limited (‘Star Cement’) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied, should not be deemed to constitute an offer.
is made as to, and no reliance should be placed on, the fairness, accuracy, No representation or warranty, express or implied, completeness, or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be its future financial ‘forward-looking statements, including those relating to the general business plans and strategy of Star Cement, condition and growth prospects, future developments in its industry, and its competitive and regulatory environment, and statements which contain words or phrases such as ‘will’, ‘strong growth prospects’, among many others, or similar expressions or variations of such expressions. These forward-looking statements involve a number of risks, uncertainties, and other factors that could cause actual results, opportunities, and growth potential to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks with respect to its Formulations and API business.
‘horizons of growth’,
‘expected to’,
Star Cement may alter, modify, or otherwise change in any manner, the content of this presentation, without obligation to notify any person of such revision or changes. This presentation cannot be copied and disseminated in any manner.
THANK YOU
Mr. Manoj Agarwal investors@starcement.co.in www.starcement.co.in
Corporate Office ‘Century House’, 2nd Floor P-15/1, Taratala Rd, 2nd Floor, CPT Colony Taratala, Kolkata, West Bengal 700 088