Sagar Cements Ltd - Q1 FY22 Result Report - YES Securities

(Rating: BUY, Rs1,501, Upside: 15.4%)

- Sagar cements has delivered strong volume/EBITDA growth of 58.5%/23.1%YoY growth aided by higher net realization and lower clinker cost. Sagar reported volumes of 0.88MT for the quarter wherein Andhra Pradesh and Telangana contributed 55% as there was covid related restrictions in other regions. Blended NSR/te came in at Rs4463/te.

- We have upgraded our EBITDA estimates by 16%/17% translating in absolute EBITDA of Rs3.46bn/Rs4.91bn for FY22E/23E to accommodate lower cost of clinker production due to inventory spill over in the quarter. And EPS has moved up by 29.8%/30.8% for FY22E/23E.

- Currently, at CMP of Rs1301/share, company trades at 6.9x of FY23E EV/EBITDA. On the back of better demand scenario, strong stable prices and better than expected profitability, we assigned 8x FY23E EV/EBITDA which translates in price target of Rs1,501/share with potential upside of 15.4% upside (previous TP of Rs1,051/share). We maintain our BUY rating on stock.

Shares of SAGAR CEMENTS LTD. was last trading in BSE at Rs. 1312.3 as compared to the previous close of Rs. 1302.15. The total number of shares traded during the day was 3817 in over 901 trades.

The stock hit an intraday high of Rs. 1331.6 and intraday low of 1302. The net turnover during the day was Rs. 5032537.

Source : Equity Bulls

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