Sanghi Industries Ltd. share price target

Outlook, Valuation. With ~98% of the Kutch expansion completed (3.3m tons for clinker, 2m tons for cement), management expects production to commence by Q3 FY21. The Surat GU expansion continues to be deferred. The company has applied for a moratorium on loan repayment. Clinker exports are expected to be poor in the near term. While demand in Maharashtra continues to be weak, pent-up demand and rural demand in Gujarat are expected to provide a boost. We expect volumes to dip 4% in FY21 and grow 39% in FY22 on greater demand and the Kutch GU...

Operating performance: Slump in volumes was offset by robust pricing scenario in Gujarat during Q4FY20 (NSR +19%y/y)andsofterenergycosts.Accordingly,EBITDA/te ofSNGIstoodatRs1,069sturdygrowthof65%y/ywhile absoluteEBITDAgrewby~12%toRs514mn. Leverage position: Total Net debt/EBITDA of company...

Volumes decline, but realizations healthy: Volumes declined 12% YoY to 0.6mt in 1QFY20 due to demand pressure in Gujarat (-11% YoY). However, realizations were up 13% YoY at INR4,562/t, resulting in revenue of INR2.7b (flat YoY; our estimate: INR2.6b). driving an improvement in margins: Unitary cost increased 2% YoY to INR3,469/t, as savings in freight and power & fuel cost were offset by higher other expenses. However, strong realizations led to a 71% YoY (+68% QoQ) increase in EBITDA/t to INR1,093, with EBITDA at INR657m (+51% YoY; our...

Sanghi Industries' operating performance was lower than our estimates with EBITDA at INR 32.1 Cr against our estimate of INR 42.5 Cr.

Sanghi Industries' operating performance was above our estimates with adjusted EBITDA at INR 36.4 Cr against our estimate of INR 27 Cr.

Lower-than-estimated cost/t supports margins: Unitary cost declined 1% QoQ (+3% YoY) to INR3,415/t (our estimate: INR3,652), led by lower freight/cost. EBITDA/t declined 19% QoQ (-46% YoY) to INR523, with EBITDA at INR324m (-31% YoY/-25% QoQ) as against our estimate of INR236m. PAT declined 82% YoY to INR20m (our estimate: INR25m). Management commentary: (1) SNGI introduced slag cement in the quarter. Higher slag prices led to increased RM cost. (2) The company plans to continue growing higher than industry, with plans to reach volumes of ~2.83mt in FY19. (3) Power & fuel cost was higher YoY in 2QFY19, as the...

Realizations at INR4,114/t (-5% YoY, +1% QoQ) were lower than our estimate of INR 4,191/t higher prices in April-May were offset by lower prices in June. Revenue fell 4% YoY (but grew 8% QoQ) to INR2.7b, in line with our estimate. Unitary cost grew 4% YoY (and 1% QoQ) to INR3,465/t, led by higher power and fuel cost at INR1,232/t (+18% YoY, +13% QoQ). EBITDA/t stood at INR649 (-35% YoY, -2% QoQ). EBITDA declined 34% YoY (but grew 5% QoQ) to INR434m v/s our estimate of INR480m. Interest cost at INR123m declined 34% YoY and 29% QoQ due to re-pricing of high cost debt of INR3.3b with lower interest cost. (1) Strong growth in underlying markets of Gujarat at 15% YoY and Maharashtra at 9% YoY; (2) Freight cost/t declined QoQ due to reduction in lead distance; (3) Lower proportion of PPC sales at 33% v/s 38% in 1QFY18 due to unavailability of flyash.

higher freight costs and unavailability of lignite. It delivered EBITDA of Rs410mn against our estimate of Rs478mn and EBITDA/tonne of Rs670 v/s our estimate of Rs770. Sales volume declined by 21.3% yoy due to plant shutdown for 15 days. The company had to undertake some unscheduled repair & maintenance. Realization remained strong at 31% yoy, as cement prices were better in Gujarat. impact due to accounting changes for freight and (C) unavailability of lignite, leading to switch to imported coal. EBITDA/tn stood at Rs670 vs/ Rs541/Rs827 in Q4FY17/Q3FY18. Expansion plans of 4mt are on track and should get completed by Apr'20E. We prefer...

Sanghi Industries Limited (SNGI) Q3FY18 results were broadly in-line with our estiamtes. Net revenue and cement sales volume remained in-line our estimaes while net profit exceeded our...

SIL's strength lies in its access to 1b tonne of quality marine limestone reserves, which should allow it to sustainably add capacity over the next 15 years. We expect SIL's margins to expand by 8.4pp over FY17-20, led by its three-pronged strategy: (i) commissioning of a waste heat recovery system (WHRS), (ii) focusing more on the coastal mode of transportation by way of acquisition of ships and (iii) achieving a favorable revenue mix with higher proportion of Portland Pozzolana Cement (PPC). In our view, SIL is a strong candidate for a re-rating, led by (i) expected increase in its capacity from 4.1mt now to 8.2mt over the next 30 months and (ii) anticipated scale benefits led by diversification into new higher-priced markets

Sanghi Industries Limited (SNGI) reported a mixed set of numbers in its Q2FY18 financial results. Net revenue remained flat y-o-y to INR 206crs as against INR 207crs in Q2FY17 and our estimate...

Maintain NEUTRAL with a revised TP of Rs 112 (7.0x Sep-19 EV/EBITDA, USD105/t). Sanghi Industries (SNGI) delivered a weak quarter (EBITDA at Rs 467mn, (0.5)/(29.3)% YoY/QoQ), despite good headline profitability (EBITDA/t at Rs 975, 20.9/(1.9)% YoY/QoQ). This was largely driven by weak volumes (0.48 mT, (17.7)% YoY), weighed down by heavy rains in Gujarat, leading to a dispatch holiday of a week or so.

We maintain our cautious stance on most large caps, given rich valuations. Remain constructive on Birla Corp and Sanghi Industries. Cement prices are largely flattish YoY, and declines are seasonal in nature. However, continued sand shortages in states which contribute ~20% of cement demand may weigh on the volumes of cement companies in 2QFY18. Any delay in restoration of pet-coke supplies from US Gulf Coast would weigh on cement stocks.

Sanghi Industries Limited (SNGI) reported a mixed set of numbers in its Q1FY18 financial results. Net revenue increased 6% y-o-y and 17% q-o-q to INR 288crs as against INR 271crs in...

Maintain BUY (TP: Rs 98, 5.5x June-19 EV/EBITDA, USD 93/t). Sanghi Industries (SNGI) witnessed a strong jump in realisations (Rs 4,325/t, 15.0/37.5% YoY/QoQ), driving the beat on EBITDA (Rs 994/t, 10.5/84.0% YoY/QoQ, est 855/t). Pricing gains, however, were offset largely by hardening costs (16.4/27.8% YoY/QoQ). Even ex-freight costs were sharply higher (15.5/34.3% YoY/QoQ), driven by hardening P&F; costs and overheads.

Sanghi Industries Limited reported a mixed set of numbers in its Q4FY17 financial number. Net revenue decreased due to lower realisation and lower clinker sales volume while...

Sanghi Industries (SNGI) delivered EBITDA/t of Rs 540, ahead of estimates (Rs 486/t, -34.8% YoY, 7.1% QoQ). Lower clinker sales (34kT, -85% QoQ and YoY) and cement pricing (-17% QoQ and YoY) drove the decline in EBITDA/t.

Sanghi industries (SNGI) Q4 result was largely in-line with estimates on operating levels with EBITDA at Rs423mn against our estimate of Rs432mn and EBITDA/tn at Rs541 against our estimate of Rs577. Tax reversals and lower interest cost led to higher profits. Sales volume of Cement & Clinker was down 13.9% YoY to 0.78mt primarily due to 85% YoY decline in clinker sales. Domestic sales volume was up 10% YoY to 0.72mt. However,...

Sanghi Industries (SNGI) is a well integrated cement manufacturing player based in Gujarat with an installed grinding capacity of 4.1MTPA, clinker capacity of 3.6MTPA and a 60MW multi-fuel...

Sanghi Industries (SNGI) delivered EBITDA/t of Rs 816, much ahead of estimates (Rs 577/t). This was on account of lower freight ((Rs 1,035/t, -22.0% YoY, -14.1% QoQ)), which helped overall costs lower (Rs 2,789, -18.7 YoY, -2.5% QoQ). Volume growth remained strong (0.56 mT, 5.5% YoY, nil clinker).