Sagar Cements Ltd. share price target

Sagar Cements (SGC) has reported disappointing performance in 2QFY19,with higher-thanexpected decline in average NSR and higher power and fuel cost dragging its operational performance. Consolidated EBITDA declined by 45% YoY and 42% QoQ to Rs211mn vs. our estimate of Rs404mn and street estimate of ~Rs392mn. EBITDA/tonne stood at mere Rs294 compared to Rs642 and Rs492 in 2QFY18 and 1QFY19, respectively. Sales volume stood at 0.72mnT (+19.8% YoY and -3.3% QoQ). Prolonged shutdown of BMM unit (for 52 days) along with shutdown of 25 CPP led to higher operating cost in terms of higher power and freight cost (despite benefit from Bayyavaram unit) and other fixed cost. A sharp decline in operating profit and 29% YoY (+26% QoQ) surge in depreciation led to PBT loss of Rs106mn. We believe...

Sagar Cements Ltd (SGC) reported poor operating performance with EBITDA at INR 21.1 Cr against our estimate of INR 37 Cr

Better than expected cost rationalization, drives operating performance SGC reported topline growth of 6.2% YoY to ` 2.74bn (2.3% lower than D'est). EBITDA at ` 364Mn (-14.2% YoY) was ahead of our estimates of `312Mn,...

ICICI Securities Ltd | Retail Equity Research Sagar Cement's results were above our estimates. Revenues increased 6.2% YoY to | 274.9 crore (vs. I-direct estimate of | 271.6 crore) in Q1FY19 mainly led by 19.1% YoY growth in volumes to 0.75 MT (vs. Idirect estimate of 0.75 MT). However, realisation declined 10.3% YoY to | 3,709/t (vs. I-direct estimate of | 3,644/t) EBITDA margin declined 316 bps YoY to 13.3% mainly led by higher freight cost (up 14.5% YoY) and raw material cost (up 55.8% YoY). However, EBITDA margins remained above our estimate of 12.7%...

Sagar Cements Ltd (SGC) reported a weak operating performance with EBITDA at INR36.4 Cr against our estimate of INR42.5 Cr on account of lower-than-anticipated realization.

Consolidated revenue grew by 26% YoY to Rs2.9bn mainly supported by 24% YoY and 17% QoQ growth in sales volume to 0.79mnT. Notably, sales volume for FY18 grew by a strong 23% YoY to 2.71mnT. A decent demand environment in AP/Telangana, Karnataka and Odisha markets...

ICICI Securities Ltd | Retail Equity Research Sagar Cements came out with a mixed set of Q4FY18 numbers. While revenues were above our estimates, EBITDA, PAT was below our estimate mainly due to higher than anticipated freight and power cost Revenues increased 26.0% YoY to | 294.9 crore (vs. I-direct estimate of | 272.2 crore) in Q4FY18 mainly led by 24.1% YoY growth in volumes to 0.8 MT (vs. I-direct estimate of 0.73 MT) and 1.5% YoY growth in realisation to | 3,700/t (vs. I-direct estimate of | 3,704/t)...

Sagar Cements Limited (SGC) reported a moderate set of numbers in its Q3FY18 financial results due to lower realisation and higher raw material cost. Cement sales volume increased by 44% YoY...

Cost Saving Measures Aid Performance: Maintain BUY Sagar Cements (SCL) has reported a slightly better-than-estimated operating performance in 3QFY18, with its consolidated EBITDA growing by a moderate 7% YoY to Rs316mn vs. our estimate of Rs298mn. Though the average realisation/tonne declined by 8.7% YoY and 6.5% QoQ to Rs3,655 (1% steeper than our estimate), SCL's operating cost/tonne substantially decreased by 6.6% YoY and -2.6% QoQ to Rs3,203. Notably, savings of Rs40mn owing to new 6MW WHRS, reduction in lead distance and gradual shift to petcoke usage in BMM unit aided to SCL contain costs. Consolidated sales volume rose by 44% YoY and 14% QoQ to 0.68mnT...

We are pretty enthused by Sagar Cement Ltd.'s astute understanding of the cement cycle ,meticulous and careful selection of acquisition targets and its relentless focus on cost efficiencies. SCL is our favourite way to play the cement growth story in South India.