Star Cement targets 12% volume growth as subsidies drop by ₹50 crore
Management expects a volume uptick in FY27, but rising fuel costs and a ₹50 crore subsidy hit loom over the expansion plan.
— 2 earlier stories on Star Cement Ltd. →What's new
- Management projects a 10-12% rise in sales volumes for FY27.
- Subsidies will drop by ₹40-50 crore from the previous year's ₹184 crore.
- Capex is set at ₹600-700 crore for FY27 and ₹1,500 crore for FY28.
Why this matters
The company is balancing aggressive capacity expansion with a tightening subsidy environment. The near-term margin pressure from coal supply shortages will test whether the volume growth can offset rising fuel costs.
What we're watching
- Progress on the new grinding units in Bihar and Haryana.
- Whether coal supply shortages normalize in the second half as expected.
- Impact of the ₹50 crore subsidy reduction on annual cash flow.
The full read
Star Cement is betting on a 10-12% increase in sales volumes for FY27. It needs that growth.
However, it faces a ₹40-50 crore decline in subsidies from the previous year's ₹184 crore. To support this expansion, the company has committed to a heavy investment cycle, with ₹600-700 crore in capex planned for FY27 and a further ₹1,500 crore for FY28, directed toward new grinding units in Bihar and Haryana and a clinker plant in Rajasthan.
The immediate hurdle is fuel cost, which management expects to rise by ₹0.10-0.15 per GCV in the first half due to coal supply shortages. While management anticipates a normalization of these costs later in the year, the combination of lower subsidies and higher input prices creates a narrow margin for error. The expansion plan is ambitious, but the next test is whether the volume growth can actually materialize in a cost-constrained environment.
Questions answered
- What is the company's capital expenditure plan for the next two years?
- Star Cement plans to spend ₹600-700 crore in FY27 and ₹1,500 crore in FY28. The funds are earmarked for new grinding units in Bihar and Haryana and a clinker plant in Rajasthan.
- How much will the subsidy reduction affect the company?
- Management expects subsidies to fall by ₹40-50 crore in the current financial year. This follows a base of ₹184 crore in the previous year.
- What cost pressures does the company face in the first half of FY27?
- Fuel costs are set to rise by ₹0.10-0.15 per GCV. Management attributes this to coal supply shortages but expects costs to normalize later in the year.
- What is the sales volume growth target?
- The company is guiding for a 10-12% increase in cement sales volumes for FY27.
Story so far
All notes on STARCEMENT →- 27 May 2026 · 4:35 PM IST Star Cement targets 12% volume growth as subsidies drop by ₹50 crore
- 1d ago Star Cement slashes non-cement margin guidance to 8%
- 5d ago Star Cement swings to ₹130 cr profit as board reshuffles top brass