ICICI Direct has given Buy recommendation for Sagar Cement with a target price of Rs. 1700 in its research report issued on Jul 29, 2021

ICICI Direct’s research report on Sagar Cement

Sagar Cements is the cost efficient player in South India with cement capacity of 5.75 MT. Region wise, AP/Telangana account for ~60% of sales followed by Tamil Nadu (16%), Karnataka (9%) with balance from Maharashtra and Odisha. From primarily being a south-based player, the company will be able to develop a presence in the faster-growing eastern market and the more profitable central market with the 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 helps it to maintain cost efficiency


Given the healthy outlook, cost efficiency, healthy b/s and relatively inexpensive valuations, we maintain BUY rating. We value Sagar at Rs 1,700 i.e.7.0x FY23E EV/EBITDA


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