Star Cement share price slumps 10% in September so far. Should you buy, sell or hold?

Star Cement share price has declined over 10 per cent in September so far on profit booking at higher levels amid weak market sentiment. The cement stock hit a 52-week high of ₹308.10 on September 2 and has been under pressure since then. On a monthly scale, the stock has declined 10.2 per cent from September 1st to the 29th and is set to end the month with double-digit losses after two consecutive months of gains.

In July, Star Cement shares gained nearly 13 per cent, followed by a 19 per cent jump in August. Year-to-date, the stock is up 11 per cent, while over the last year, the mid-cap cement stock has clocked a gain of 26 per cent.

Is the recent correction in the stock price an opportunity to buy?

Star Cement shares: Buy, sell, or hold?

Fundamental experts appear positive about the stock for the long term, finding it well-positioned to capitalise on the rising demand.

Brokerage firm Axis Securities has maintained a buy rating on the stock with a target price of ₹325, implying an upside potential of 27 per cent.

"With its upcoming capacity expansion, the company is well-positioned to capitalise on the rising demand in its operating region, primarily the North-East. We project Star Cement will achieve a CAGR of 12 per cent and 16 per cent in volume and revenue, respectively, and a 31 per cent and 52 per cent CAGR in EBITDA and PAT, respectively, over FY25-FY27E," said Axis Securities.

Axis underscored that Star Cement is the largest cement producer in the NER region with 27 per cent market share. Moreover, its strong entry barriers created by the regional demography, which support the company in maintaining a healthy market share, are also a key strength.

"Increasing overall cement demand in its key operating regions, high consumption in the eastern and north-eastern regions, augmenting railway infrastructure, and supportive initiatives by the proactive government are the key growth drivers of the company," said Axis.

Star Cement technical views

While the fundamental factors suggest that the stock could be a buy for the long term, technical experts advise waiting for directional clarity before initiating new long positions.

According to Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, the stock appears to be in a corrective phase. However, despite the recent fall, there are no clear signs of reversal, suggesting that the trend may remain subdued in the near term.

Patel expects a base-building process to occur in the ₹240–245 zone, which could act as a crucial accumulation area before any meaningful upside reversal takes place.

"In the short term, support is firmly placed near ₹240, while resistance is seen at ₹264. A decisive move beyond these levels will likely provide directional clarity for the coming sessions," said Patel.

Kunal Kamble, a senior technical research analyst at Bonanza, said a decisive break below ₹248 may trigger sharp selling pressure. However, the decline in volumes suggests that the recent correction is largely a result of profit booking rather than aggressive selling, indicating a lack of strong conviction among sellers.

"On the momentum front, the RSI has entered the oversold zone, highlighting the possibility of a pause or reversal in the ongoing downtrend. The flattening of DI+ and DI- with a declining ADX reflects weakening trend strength, which increases the probability of consolidation or a reversal in the coming sessions," Kamble said.

"From a price action perspective, a buying opportunity may be considered only on a move above ₹267.50, which would confirm strength returning to the counter," said Kamble.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.