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Buy Sagar Cement; target of Rs 265: ICICI Direct

ICICI Direct is bullish on Sagar Cement has recommended buy rating on the stock with a target price of Rs 265 in its research report dated May 13, 2022.

May 14, 2022 / 01:53 PM IST
 
 
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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.



Outlook


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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first published: May 14, 2022 01:53 pm
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