Sagar Cements surges 8%, hits 52-week high on robust Q2 results

Shares of Sagar Cements rallied 8 per cent and hit a 52-week high of Rs 740 on the BSE on Thursday after the company’s consolidated net profit jumped 10-fold at Rs 50.17 crore in the September quarter (Q2FY21). It had reported a profit of Rs 4.92 crore in the year-ago quarter.

Revenue from operations grew 23 per cent year on year (YoY) at Rs 326 crore against Rs 265 crore in the corresponding quarter of previous fiscal. The revenue growth was led by 20.8 per cent YoY increase in realisations and 1.7 per cent YoY growth in volumes. Ebitda (earnings before interest, taxes, depreciation, and amortization) margins doubled to 32.1 per cent in Q2FY21 from 16 per cent in Q2FY20 on lower production costs.

The steady realisations coupled with better efficiencies and cost containment has helped the company in delivering higher profitability and margins. The rising share of captive power producers (CPP), savings from Waste Heat Recovery system, improving operations on cooler installations at Sagar Cements (R), optimal fuel mix, close proximity of units to coal mines and ports have helped in lowering costs and maintaining higher efficiencies.

The management said volumes and prices are gradually improving on the back of good demand especially in the rural areas. Further, improving labor availability and restoration of supply chains following unlocking of the economy, is expected to maintain the demand momentum going forward, it said.

In the past month, Sagar Cements has outperformed the market by surging 50 per cent, as compared to 7.6 per cent rise in the S&P BSE Sensex. At 09:53 am, the stock was up 5 per cent at Rs 723, against 0.21 per cent decline in the benchmark index. The trading volumes on the counter more-than-doubled with a combined 242,000 equity shares changing hands on the NSE and BSE, so far.