Sagar Cements (SCL) continued to report a healthy set of numbers in 2QFY18 beating our estimates mainly due to better-than-expected operational performance. Its reported EBITDA surged by 33% YoY to Rs384mn vs. our estimate of Rs329mn. A significant reduction in other expenditures/tonne (-22% YoY and -7% QoQ) and a lower-than-expected raw material prices led to this outperformance. However, surge in fuel and freight cost led to 4% YoY rise in operating cost/tonne to Rs3,288. EBITDA/tonne came in at Rs643 compared to Rs565 and Rs666 in 2QFY17 and 1QFY18, respectively. Net profit stood at Rs85mn as against Rs0.4mn and Rs100mn reported in 2QFY17 and 1QFY18, respectively. We continue to believe that likely improvement in...