Sagar Cements Ltd.
|BSE: 502090||Sector: Industrials|
|NSE: SAGCEM||ISIN Code: INE229C01021|
|BSE 00:00 | 02 Dec||232.15||
|NSE 00:00 | 02 Dec||232.20||
|Mkt Cap.(Rs cr)||3,034|
|Mkt Cap.(Rs cr)||3034.20|
Sagar Cements Ltd. (SAGCEM) - Chairman Speech
Company chairman speech
I write to you at a time when the worst of the pandemic seems to bebehind us even though spurts in COVID-19 cases now and then make a case for practisingcaution.
Reviewing the external environment I can say with fair optimism thatwe are poised for times of great opportunity. The mettle of organisations was testedduring the pandemic and the resultant reorganisation digitalisation and overallpreparedness of companies have set them up for accelerated growth in a buoyant marketscenario. This is especially true for companies such as Sagar Cements which continue tomaintain a strong long-term value focus.
Reviewing the economic environment
In FY2022 the Indian economy is estimated to have grown by 8.9%(Source: NSO) a significant bounce-back in real terms compared to the last fiscal. Thiswas enabled by strong government expenditure and the release of pent-up consumer demand.Projects under the National Infrastructure Plan (NIP) and initiatives such as theProduction Linked Incentive scheme have reinvigorated economic activity acting as forcemultipliers. However the economy faces downside risks in terms of elevated inflation andhigher fiscal deficit which could push the Reserve Bank to move away from itsaccommodative stance.
Strong prospects for cement
The Union Budget has earmarked 35% more capex and proposedinfrastructure spend of over Rs. 10 Lakh Crores during FY2023. This indicates a reinforcedcommitment from the government towards infrastructure growth which augurs well for thecement industry. The government?s plan to construct 25000 km of highways and roadsin FY2023 together with continued execution of projects under the Bharatmala Pariyojna(BMP) and other infrastructure programmes are welcome developments for the industry.
On the retail and housing front the Pradhan Mantri Awas Yojana (PMAY)is attracting strong focus. Further following a resurgent real estate demand newprojects across a combined area of 450 million sq ft are expected to be launched duringFY2022-24 in the top 10 cities in India.
With the strong growth across sectors and user industries cement isexpected to experience buoyant demand in the coming years. Industry players areaccordingly announcing greenfield and brownfield projects which are expected tocapitalise on these encouraging prospects. The sector is also expected to witness mergersand acquisitions with some room for consolidation.
Sagar Cements in FY2022
Resilience and growth underlined FY2022 for Sagar Cements. On an annualbasis we were able to maintain an EBITDA margin of 17% driven by our cost efficiencymeasures and operational excellence that helped us meet increasing demand. However themargin was less compared to 30% a year ago predominantly as a result of rising inputcosts.
I am proud to say that this year also saw us commission our greenfieldprojects in Madhya Pradesh and Odisha. Together they increased our installed capacity byover 40%. The projects also assume significance from a strategic point of view as theygive us solid entry points to the Central and Eastern markets which are ripe withopportunities. They are thus critical to our transition from being a predominantly SouthIndia-based player to transforming into a more geographically diversified cement company.
ESG and climate action
One of the biggest realities of today is climate change which needsimmediate attention from everyone especially those in core sectors such as cement. Therecently concluded UN Climate Change Conference in Glasgow (COP26) and preceding reportby the Intergovernmental Panel on Climate Change (IPCC) portends a Code Red?for humanity and calls for concerted action across governments and across sectors. Indiahas supported this mission and committed to Net Carbon Zero by 2070.
At SCL we are reducing our overall carbon footprint through structuredinitiatives increased blending and are in the process of charting our own net zeroroadmap. We are also charting stringent targets on various ESG parameters which webelieve will guide us towards improved sustainability as an organisation.
A future of opportunities
My outlook for the immediate and the long-term remains highlyoptimistic with regards to India the cement industry and Sagar Cements in particular.There are substantial opportunities for growth and impact and we are well-placed todeliver on our strategy and commitments. In fact in FY2022 in recognition of ourcontinued performance Premji Invest the private equity and investment arm of one ofIndia?s largest philanthropic endowments has acquired a 10% equity stake in ourbusiness.
I would like to take this opportunity to thank all our employees whohave continued to raise the bar at Sagar Cements and have helped us in realising ourvision every day. I also express my sincere gratitude to all our investors customerspartners communities and other stakeholders who continue to repose their faith in SagarCements and our journey.
K. Thanu Pillai