Star Cement Shares Surge 3% After UltraTech Stake Acquisition
Shares of Star Cement experienced a notable uptick on Friday, rising 3.31% to ₹237.35 at 11:10 AM on the BSE. The surge in the stock price follows news that UltraTech Cement, India’s largest cement producer and a part of the Aditya Birla Group, has acquired an 8.69% stake in the company for ₹851 crore.
UltraTech’s acquisition of 3.70 crore equity shares at ₹235 per share is seen as a strategic move to reinforce its dominance in the Indian cement market. This transaction signals UltraTech’s commitment to enhancing its market position, particularly in the growing North-Eastern region where Star Cement is a leading player. Star Cement, with a current production capacity of 5.7 million tonnes per annum (MTPA), is in the midst of a significant capacity expansion. The company aims to increase its capacity to 9.7 MTPA by the 2025-26 fiscal year, with plans to further raise this to 12 MTPA by 2027. This expansion strategy positions Star Cement for continued growth, particularly as demand for cement rises in the region.
The company also reported an 8% growth in revenue for the previous fiscal year, reaching ₹2,911 crore, up from ₹2,705 crore the previous year. This growth highlights Star Cement’s strong operational performance despite the competitive nature of the cement industry. In addition, Star Cement announced the closure of its trading window, which will remain closed from January 1, 2025, until 48 hours after the approval of its unaudited financial results for the third quarter and nine months ending December 31, 2024. The date for the Board meeting to approve these results will be disclosed in due course. The stock of Star Cement hit a 52-week high of ₹255.95 on May 25, 2024, and reached a low of ₹169.80 on January 18, 2024, reflecting some volatility over the past year. However, with UltraTech Cement’s strategic acquisition, Star Cement’s growth prospects remain promising, and its stock is poised to benefit from the long-term expansion plans.
