Sagar Cement witnesses further margin erosion during Q4FY22 on weak cement pricesSAGCEM - 220 Change: 3.65 (1.69 %)
News: Sagar cement saw a further margin contraction 170bps QoQ to 12.2% (down of 1278bps YoY) during Q4FY22 on lower than expected realizations. Revenues were up 50.4% QoQ to Rs.501.7 crore while company reported net loss of Rs.19.2 crore on higher interest expenses
Views: While growth in the revenues was led by capacity expansion, weak realizations broadly indicate high elasticity of demand that is restricting the company to pass on the cost pressure on to the consumer. Given the ongoing cost pressure and higher debt due to capacity expansion we expect company to face challenges to improve margins in the medium term.