The 2 reports from 2 analysts offering long term price targets
for Sanghi Industries Ltd. have an average target of 23.50. The consensus estimate
represents a downside of -33.52%
from the last price of 35.35.
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' (SNGI) performance in 4QFY19 was steady with revenue growth of 9% YoYat Rs2.8bn as volume jumped 13%. Realisation, however, fell 4% YoY to Rs3,866/tn as dominant sales (~68%) were in the non-trade segment (adjusted to ready-mix concrete revenues of Rs69mn). SNGI's key market continues to be Gujarat with 83% of sales volume contributed by the state. Cement volume jumped 13% YoY (including domestic and export cement sales and small quantity of clinker sales) to 0.70mt in 4QFY19. Operating costs were well controlled, staying flat YoY at Rs3,304/tn, largely because of lower energy and logistic costs. However, this was negated by the jump in other expenditure by 75% to Rs298mn driven by higher advertising and technology-related expenses. Effectively, EBITDA margin...
Sanghi Industries' (SNGI) dismal show continued in 3QFY19, with flat cement volume growth and sharp cost escalation that offset realisation growth. Cement volume (including marginal clinker sales) were flat YoY at 0.66mnmt on steady demand in key markets. However, realisation gained 3.4% (adjusted for ready-mix concrete or RMC revenues of Rs69mn)at Rs3,897/tn. Conversely, operating costs rose ~18% YoY to Rs3,516/tn driven by higher energy, logistics and raw material expenses and the impact of lower clinker exports that reduced blended volume in 3QFY19. Effectively, EBITDA margin declined sharply to 12.1% from 22.1% in 3QFY18 as EBITDA fell steeply by 48% YoY to Rs322mn. EBITDA/tn fell 43% YoY to Rs485/tn (in line with our estimate of Rs489/tn). Interest expenses declined - following debt refinancing at...
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...
Sanghi Industries' (SNGI) dismal show continued in 2QFY19, despite volume growth, because of weak realisation and cost escalation. Cement volume (including minuscule clinker sales) grew sharply by 26% YoY at 0.60mnmt on strong demand in key markets. However, the realisation slipped 5% (adjusted for ready-mix concrete or RMC revenues of Rs37mn) to Rs4,008/tn. Conversely, operating costs rose ~6.2% YoY to Rs3,528/tn driven by higher energy, logistics and raw material expenses. Effectively, EBITDA margin declined sharply to 13.3% from 22.7% in 2QFY18 as EBITDA fell steeply by 31% YoY to Rs324mn. EBITDA/tn fell 45% YoY to Rs540/tn (below our estimate of Rs550/tn). Interest expenses declined following debt refinancing at a lower rate (from 15.5% to ~11%) to Rs167mn versus Rs189mn in 2QFY18. Other...
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.
Realisation Drives Performance; Offsets Cost Escalation ACCUMULATE Sanghi Industries (SNGI) reported a steady set of numbers for 4QFY18, despite volume hit (because of maintenance impact) and higher operating costs. Cement volume (including clinker) was down ~24% YoY to 0.60mnmt, (below our estimate of 0.84mnmt) because of a 15-day plant shutdown by SNGI. Operating costs surged ~31% YoY to Rs3,433/tn, mainly because of energy, logistics and raw material expenses. However, with the possible pass-through on account of healthy prices in key SNGI markets (Gujarat) realisation (adjusted to readymix concrete or RMC revenues) leapt ~33% YoY to Rs4,159/tn and guarded the margins. Effectively, EBITDA (adjusted to non-recurring operating...
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.
EBIDTA increased to INR 661 mn which was up by 0.9% Y-O-Y and 56% Q-O-Q and EBIDTA margin stood at 23% as against 24.2% same quarter last year. EBITDA/ton surged to INR 991 as against INR 910 in Q1FY17 primarily on account of sharp increase in realizations. PAT stood at INR 316 mn which was up by 32.8% Y-O-Y and 20.3% Q-O-Q while PAT Margin stood at 11%. Net profit was primarily...
