CRISIL Ratings stated that the rating upgrade reflects its 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 WHRS and a captive power plant with capacity of 51 MW as of 30 September 2023.

For the six months ended 30 September 2023, SCL reported profit after tax (PAT) of Rs 133.9 crore and operating income of Rs 1,345.7 crore, against Rs 98.6 crore and Rs 1258.4 crore, respectively, for the corresponding period of the previous fiscal

The scrip rose 1.52% to end at Rs 177 on the BSE.