'Sell' Sagar Cements Shares Maintains Dolat Capital Post Muted Q2 Results, Revises Target Price — Here's Why

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Dolat Capital Report

Sagar Cements Ltd.’s Q2 FY26 revenue and volume came above our estimates, however, realization, Ebitda and Ebitda/tonne were below estimates; Net loss was higher than estimates.

We expect revenue/Ebitda compound annual growth rate of 13.9%/57.6% over FY25-28E led by 9.9%/15.2%/6.1% volume growth and +11.0%/-0.8%/0.0% realization growth in FY26E/FY27E/FY28E.

We also expect APAT to improve to Rs 1.2 billion in FY28E from a net loss of Rs 1.8 billion in FY25.

We cut our FY26E/FY27E Ebitda by 4.1%/6.7% considering lower realization and introduce FY28E. We expect Ebitda/tn of Rs 641/ Rs 677/Rs 727 for FY26E/FY27E/FY28E vs Ebitda/tn of Rs 362 for Q2 FY26. Accordingly, we maintain ‘Sell’ rating with revised target price of Rs 236 based on 7.0x consolidated FY28E EV/Ebitda.

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