Sagar Cements Gets 'Sell' Rating From Dolat Capital On Q3 Results, Says Lower Profitability Remains A Concern

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Dolat Capital Report

Sagar Cements Ltd.’s Q3 FY25 results came in line, however, net loss came higher than estimates.

We expect revenue/Ebitda compound annual growth rate 7.1%/18.3% over FY24-27E led by -0.9%/16.4%/14.1% volume growth and -7.3%/+0.8%/-0.1% realization growth in FY25E/FY26E/FY27E.

We also expect improvement in net loss to Rs 228 million in FY27E versus Rs 837 million in FY24.

We decrease our FY25E/FY26E/FY27E Ebitda estimates by -22.7%/- 15.6%/-11.5%, post factoring lower realization coupled with higher opex/tn and expect Ebitda/tn of Rs 310/Rs 482/Rs 550 for the same period.

Maintain ‘Sell’ rating with revised target price of Rs 174 based on 7.0x consolidated FY27E EV/Ebitda + Vizag land monetization at Rs 49/share (Rs 6.4 billion).

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