- 20 Oct 2023
- ICICI Securities
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STRONG VOLUME GROWTH WITH SHARP IMPROVEMENT IN MARGINS
SAGCEM - 226 Change: 3.71 (1.67 %)News: Revenue increased by 24% YoY (+9% QoQ) to Rs 586.8 crore, mainly led by 27% YoY (+11% QoQ) growth in sales volumes to 1.31 million tonnes. Net realization declined 2.5% YoY (2.3% down QoQ) to Rs 4471/ton. EBITDA increased sharply by 10.6x YoY (+97% QoQ) to Rs 60.2 crore as EBITDA/ton improved significantly to Rs 459/ton (vs Rs 55/ton in Q2FY23 and Rs 259/ton in Q1FY24). The sharp improvement in EBITDA/ton on YoY basis was mainly led by lower energy cost as fuel prices declined significantly (Power & Fuel cost declined to Rs 1626/ton vs Rs 2062/ton in Q2FY23). PAT loss narrowed to Rs 10.5 core (though it included Rs 14.8 crore of repairment reversal related to subsidiary Andhra Cements) as against loss of Rs 43.5 crore in Q2FY23.
Views: Consolidated volume growth of 27% YoY & 11% QoQ was mainly due to additional volumes of recently acquired Andhra Cements and strong volume growth in other subsidiary. Moreover, 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