Sagar Cements Q4 Review: Dolat Capital Upgrades Stock To 'Reduce', Hikes Target Price Post Inline Results

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Dolat Capital Report

Sagar Cements Ltd.’s Q4 FY25 revenue, volume, realization/tonne came in line with our estimates, however, Ebitda, Ebitda/tn were below estimates, and net loss was higher than estimates.

We expect revenue/Ebitda CAGR 15.9%/93.0% over FY25-27E led by 8.3%/13.7% volume growth and +9.2%/-0.1% realization growth in FY26E/FY27E. We also expect improvement in adjusted profit after tax to Rs 708 million versus net loss of Rs 1.8 billion in FY25.

We increase our FY26E/FY27E Ebitda estimates by 35.6%/29.1% post factoring higher realization and expect Ebitda/tn of Rs 691/Rs 754 for the same period vs. Rs249 for FY25.

Accordingly, we increase our multiple from 7x to 7.5x and upgrade rating to ‘Reduce’ from Sell with revised target price of Rs 231 based on 7.5x consolidated FY27E EV/Ebitda.

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