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- 24 Oct 2024
- ICICI Securities
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SAGAR CEMENT'S Q2FY25 - POOR OPERATIONAL PERFORMANCE
News: Sagar Cement’s consolidated revenue de-grew by 19% YoY (-15.2% QoQ) to Rs 475 crores, led by decline is sales volume by 11.6% YoY (-9.4% QoQ) to 1.16 million tonnes, coupled with decline in sales realisation by 8.4% YoY (6.5% QoQ). EBITDA/ton decreased by 62.6% YoY (-52.9% QoQ) to Rs 172/ton, led by decline in sales realisation & negative operating leverage. EBITDA de-grew by 66.9% YoY (-57.3% QoQ) to Rs 19.9 crores. PAT stood at a loss of Rs 55.6 crores. For 1HFY25, the consolidated revenue de-grew by 8.1% YoY to Rs 1035 crores, led by lower sales realisation of 6.1% along with decline in sales volumes by 2.1% YoY to 2.4 million tonnes. EBITDA/ton stood at Rs 268/ton (-26% YoY) led by led by decline in sales realisation & higher raw material cost per ton. EBITDA de-grew by 26.6% YoY to Rs 66.6 crores.
Views: Operational performance was severely impacted, mainly due to significant decline in sales volume and realisation. Company has mentioned that demand remained extremely subdued owing to extended monsoon season and sluggish project completions. Management has also cut its FY25E volume growth guidance significantly to ~4% YoY to 5.75 mtpa (from ~18% YoY earlier). Though we expect recovery in company’s operational performance in 2HFY25 and FY26E, significant reduction in volume guidance for FY25E is a major negative surprise.
Impact: Negative