Star Cement plans ₹600-700 cr capex this year as subsidies drop ₹40-50 cr
Volume growth guidance of 10-12% for FY27 must offset a subsidy cut and near-term coal inflation. New plants are planned for Bihar, Haryana, and Rajasthan.
— 3 earlier stories on Star Cement Ltd. →What's new
- Star Cement guided for 10-12% cement volume growth in FY27.
- Subsidies will fall by ₹40-50 crore from last year's ₹184 crore.
- Fuel costs are expected to rise ₹0.10-0.15 per GCV in the first half due to coal shortages.
Why this matters
The company is funding expansion with a tight subsidy outlook and cost pressure. The ₹40-50 crore subsidy cut is a direct earnings headwind that volume growth must cover. If coal costs don't normalize in the second half as promised, margins will be squeezed.
What we're watching
- Whether volume growth hits the high end of the 10-12% guide.
- Actual coal supply conditions in the second half of the year.
- How the ₹1,500 cr FY28 capex is funded.
The full read
Star Cement is spending ₹600-700 crore this year and ₹1,500 crore next year on new plants in Bihar, Haryana, and Rajasthan. To pay for it, management guided for 10-12% volume growth. The funding picture is tightening. Subsidies will drop by ₹40-50 crore from last year's ₹184 crore, a direct hit to other income. Fuel costs will rise ₹0.10-0.15 per GCV in the first half on coal shortages. The capex plan depends on two things: volume growth landing at the top of the guide, and coal costs normalizing in the second half as management expects.
Questions answered
- What is Star Cement's capex plan for the next two years?
- The company plans to spend ₹600-700 crore in FY27 and ₹1,500 crore in FY28. The investment goes to new grinding units in Bihar and Haryana and a clinker plant in Rajasthan.
- How will the subsidy decline affect earnings?
- Subsidies will decline by ₹40-50 crore from the ₹184 crore received in the previous year. This is a direct reduction to other income.
- What is the volume growth outlook?
- Management guided for 10-12% growth in cement sales volumes for FY27.
- What is the near-term cost outlook?
- Fuel costs are expected to rise by ₹0.10-0.15 per GCV in the first half due to coal supply shortages, but management anticipates normalization later in the year.
Star Cement Ltd.
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All notes on STARCEMENT →- 27 May 2026 · 4:35 PM IST Star Cement plans ₹600-700 cr capex this year as subsidies drop ₹40-50 cr
- today Star Cement wins preferred bid for Assam limestone block with 207.8 MT reserves
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- 33d ago Star Cement swings to ₹130 cr profit as board reshuffles top brass