ICICI Direct's research report on Sagar Cement
Sagar Cements is a south based cement player with cement capacity of 8.25 MT. Region wise, AP/Telangana accounted for ~60% of sales followed by Tamil Nadu (16%), Karnataka (9%). Going forward, it will be able to develop a presence in the faster-growing eastern and central market with recent commissioning of new 2.5 MT capacity • Self-reliance in power (61.5 MW), ability to switch between coal and petcoke for fuel requirement and split grinding units near market gives it cost advantage.
Expect costs to pick-out and operating leverage to kick-in from H2FY23E with stabilisation of new capacities. Hence, we maintain BUY rating. We value Sagar at Rs 265 i.e. 8.0x FY24E EV/EBITDA.
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