Saurashtra Cement Ltd Q2FY26 – From Hathi Strength to Tax Jathi: When Cement Meets Snowcem and Confusion
1. At a Glance
Ladies and gentlemen, gather your construction helmets and accounting calculators. Saurashtra Cement Ltd (SCL) — the Mehta Group’s dual personality child producing both Hathi Cement and Snowcem Paints — just dropped its Q2FY26 results with all the excitement of a cricket match that got washed out after three overs. Revenue came in at ₹39,562.87 lakh (₹395.6 crore), but the company still managed to post a loss of ₹11 crore. Yes, you read that right — for every tonne of cement they sold, it seems like the profits got mixed in the wrong ratio of water to concrete.
With a market cap of ₹1,086 crore and a share price hovering around ₹97.6, the company trades at a P/E of 37.7x — a number that would make any sane value investor squint and double-check the EPS. The return on equity? 0.23%. Basically, the shareholders’ money is lying at the construction site, waiting for someone to pour results over it.
But don’t underestimate this 1956-born dinosaur. It’s ISO-certified, runs cement and paint operations across India, and is trying to reinvent itself faster than your neighbourhood contractor changes his cement supplier. The latest Hathi Prime PPC cement and a range of new Snowcem paints show they’re not afraid of trying — even if the profit margin remains thinner than a coat of interior emulsion.
2. Introduction
Saurashtra Cement’s story is classic old-money Gujarat: a cement legacy brand that’s seen multiple business cycles, mergers, and boardroom shifts, but continues to soldier on like the proverbial Hathi in its brand name — slow, steady, but sometimes lost in fog.
At ₹97.6 a share, investors are left wondering: is this stock building wealth or just laying the foundation for nostalgia? The Mehta Group, which owns 66.7%, has been around long enough to remember when cement bags cost ₹25. The company, headquartered in Ranavav, Gujarat, still delivers to Maharashtra, Rajasthan, Madhya Pradesh, and the West Coast. Cement isn’t glamorous — but neither is paint thinner, and they sell both.
The challenge? Profitability swings like a pendulum in a JCB bucket. In Q2FY26, sales fell from ₹424 crore to ₹386 crore QoQ, while net profit slipped from ₹17 crore to a ₹11 crore loss. It’s not entirely surprising, though: cement companies thrive on monsoon demand and die by power costs, freight hikes, and tax notices. And oh boy, Saurashtra Cement has had plenty of those.
Between Income Tax orders enhancing income by ₹9.83 crore, demand notices totaling ₹16.56 crore, and a CFO resignation chain longer than a wedding baraat, the boardroom drama is giving Balaji Telefilms a run for its money.
3. Business Model – WTF Do They Even Do?
So what exactly does Saurashtra Cement do besides confusing accountants with its dual identity?
The main gig is cement — Portland Pozzolana Cement (PPC), Ordinary Portland Cement (OPC 53 grade), and Portland Slag Cement (PSC). Their brands “Hathi Cement” and “Sidhee Cement” are fairly well-known in the western states. Cement forms ~95% of FY24 revenue, with Clinker at 3% and Paints at 2%.
The paint division is the younger, sassier cousin called Snowcem Paints. You might remember those 90s TV ads — “Snowcem Paints, the house that shines!” Well, the shine has faded a bit, but management’s trying to repaint the legacy with new products like “OutWeather” (exterior emulsion), “SnowCoat” (interior), and “Damp Proof” (because, irony).
They’ve also launched Hathi Prime, a premium cement product. And because the Mehta Group doesn’t like half-measures, they run two cement plants in Gujarat (Ranavav and Sidheegram) and three paint plants across Maharashtra, Rajasthan, and Tamil Nadu.
In short: they’re trying to build your house and paint it — just don’t ask them to make a profit while doing so.
4. Financials Overview
Metric (₹ Cr)
Latest Qtr (Sep’25)
Same Qtr Last Yr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
386
296
424
+30.2%
-9.0%
EBITDA
-10
-40
35
+75.0%
-128.5%
PAT
-11
-31
17
+65.1%
-164.7%
EPS (₹)
-0.99
-2.83
1.51
+65.0%
-165.6%
Commentary: YoY growth looks deceptively “positive” thanks to a low base — last year’s monsoon quarter was a financial downpour. But the QoQ slip from a ₹17 crore profit to ₹11 crore loss suggests margins got bulldozed by rising costs or poor sales mix. Cement OPM fell to -3% — a reminder that pricing power in the cement sector is as stable as a wall built with damp sand.
5. Valuation Discussion – Fair Value Range
Let’s see if we can find some cement in these numbers before it all crumbles.
P/E Method:
Current EPS (TTM): ₹3.09
Industry Average P/E: ~36.8
Fair Value = 3.09 × (25–40) = ₹77 – ₹124
EV/EBITDA Method:
EV = ₹946 Cr; EBITDA (TTM) ≈ ₹103 Cr
EV/EBITDA = 9.18x Assuming fair range 7x–10x EBITDA → Fair Value Range = ₹88 – ₹125
DCF (simplified for sanity):
FCFF (last year): ₹30 Cr
Growth 5%, discount 11% → Value ~₹950–1,100 Cr
Implied Fair Value per share ≈ ₹85–₹105
📉 Fair Value Range: ₹80 – ₹120 (For educational purposes only. Not investment advice. We don’t recommend you cement your portfolio with this stock without due diligence.)
6. What’s Cooking – News, Triggers, Drama
If you think cement companies are boring, Saurashtra Cement’s announcements section reads like a Netflix series titled “Mehta vs Mehta: The CFO Strikes Back.”
Oct 25, 2025: The company got a demand order of ₹16.56 crore for ineligible ITC (FY2018-19 to 2023-24). Basically, GST authorities said “Nice try, but no input credit for you.”
Sep 30, 2025: Income-tax order enhanced income by ₹9.83 crore. Someone in the finance team clearly missed a fine print.
Sep 26, 2025: Chairman Jay Mahendra Mehta re-designated from Executive to Non-Executive. Translation: “You handle the speeches; we’ll handle
