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- 25 Jan 2024
- ICICI Securities
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STRONG VOLUME GROWTH WITH SHARP IMPROVEMENT IN MARGINS
SAGCEM - 235 Change: -1.24 (-0.53 %)News: Consolidated revenue increased by 16.3% YoY (+14.1% QoQ) to Rs 669.4 crore, mainly led by 13.5% YoY (+7.2% QoQ) growth in sales volumes to 1.41 million tonnes. Net realization improved by 2.4% YoY (+6.4% QoQ) to Rs 4757/ton. EBITDA increased sharply by 83% YoY (+44.6% QoQ) to Rs 87.1 crore as EBITDA/ton improved significantly to Rs 619/ton (vs Rs 384/ton in Q3FY23 and Rs 459/ton in Q2FY24). The sharp improvement in EBITDA/ton on YoY basis was mainly led by lower power & fuel cost/ton and positive operating leverage (on better utilisation of acquired units). PAT loss narrowed to Rs 10.2 core as against loss of Rs 27.2 crore in Q3FY23. For 9MFY24, consolidated revenue is up 11.7% YoY (led by volume growth of 12.7% YoY) with EBITDA/ton stands at Rs 456/ton (vs 330/ton in 9MFY23).
Views: Consolidated volume growth of 13.5% YoY was mainly led by due to additional volumes of recently acquired Andhra Cements and improvement in capacity utilisation of another subsidiary (Satguru Cement). There is a sharp improvement in EBITDA/ton in standalone business and both the subsidiaries, driving overall operational performance and profitability. Further improvement in capacity utilization levels of Andhra Cement and recent capacity additions at MP & Odisha, would drive volume growth for the company in coming period. Margins are also likely to improve with operational efficiency measures kicking in with positive operating leverage.
Impact: Positive