1. At a Glance
Sagar Cements posted a Q1 FY26 PAT of ₹7.5 Cr after a cemented streak of losses. Revenue grew 20% YoY, margins rose to 18.1%, and capex of ₹470 Cr was announced. Can the turnaround last? Or is this just another cement bag with a hole?
2. Introduction with Hook
If UltraTech is the Ambani of cement, then Sagar Cements is the indie startup playing the long game — armed with ambition, debt, and a whole lot of clinker.
- Q1 FY26 Volume Growth: 11%
- Q1 FY26 Revenue: ₹670 Cr (YoY up ~24%)
- Net Profit finally positive after multiple red quarters
The Jeerabad solar plant and grinding capacity expansion are part of the ₹470 Cr capex plan. Bold. Maybe reckless. Definitely spicy.
3. Business Model (WTF Do They Even Do?)
Sagar Cements does the grey stuff:
- OPC, PPC, PSC, SRC, GGBS, and Composite Cement
- Pan-India ambitions but currently focused on South & Central India
- Supplies to infra and housing sectors
Revenue mix tilts heavily toward trade sales (~60%), with institutional buyers forming the rest. B2B, B2C — and sometimes B2PrayForBreakEven.
4. Financials Overview
Q1 FY26
- Revenue: ₹670.66 Cr
- EBITDA: ₹121.45 Cr
- Net Profit: ₹7.49 Cr
- OPM: 18.1%
- EPS: ₹0.09
FY25 (Full Year)
- Revenue: ₹2,258 Cr
- Net Loss: ₹217 Cr
- OPM: 6.2%
- ROCE: -2.19%
- ROE: -10.29%
Cement Reality: Volumes growing, margins recovering. But past red ink hasn’t dried yet.
5. Valuation
MCap: ₹3,525 Cr
Book Value: ₹132
CMP/BV: ~2.05
No P/E because… profits have been on vacation
Fair Value Range: ₹200 – ₹320 (based on DCF, turnaround assumptions, and cement EV/EBITDA comps)
Expect high volatility until consistent quarterly profitability.
6. What’s Cooking – News, Triggers, Drama
- Capex Alert: ₹140.5 Cr for Jeerabad solar and grinding plant
- Green Tilt: 6 MW solar project = ESG points
- Q1 result twist: Profitable again after 4 quarters of bleeding
- Volume Up: 11% growth in Q1 — market share clawback?
- Debt Still Sticky: ₹1,448 Cr total borrowings
If cement demand sustains and fuel costs behave, Q2 might finally cement the turnaround.
7. Balance Sheet
| Metric | Mar 2025 |
|---|---|
| Equity | ₹26 Cr |
| Reserves | ₹1,697 Cr |
| Borrowings | ₹1,448 Cr |
| Fixed Assets | ₹3,109 Cr |
| Total Assets | ₹4,121 Cr |
Key Points:
- Debt-heavy, but assets in place
- Capex mostly funded via internal accruals and loans
- Tangible net worth = still positive
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| 2025 | ₹234 Cr | ₹-113 Cr | ₹-217 Cr | ₹-97 Cr |
| 2024 | ₹400 Cr | ₹-188 Cr | ₹-221 Cr | ₹-8 Cr |
| 2023 | ₹175 Cr | ₹223 Cr | ₹-367 Cr | ₹32 Cr |
Takeaways:
- Operations now generating cash
- Heavy investing phase
- Financing = tightening
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | -2.19% |
| ROE | -10.3% |
| OPM | 6.2% |
| D/E Ratio | ~0.85 |
| Debtor Days | 33 |
| Inventory Days | 232 |
| CCC | -225 Days (yes, negative = good!) |
Verdict:
Stressy. But signs of “sexy” if EBITDA continues trending up.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | Expenses | EBITDA | PAT |
|---|---|---|---|---|
| FY23 | ₹2,230 Cr | ₹2,076 Cr | ₹153 Cr | ₹10 Cr |
| FY24 | ₹2,505 Cr | ₹2,258 Cr | ₹247 Cr | ₹-52 Cr |
| FY25 | ₹2,258 Cr | ₹2,116 Cr | ₹141 Cr | ₹-217 Cr |
Margins?
- FY23: 7%
- FY24: 10%
- FY25: 6%
FY26 Q1: 18.1% — now we’re talking.
11. Peer Comparison
| Company | Revenue | PAT | ROCE | OPM | P/E | Mcap |
|---|---|---|---|---|---|---|
| UltraTech | ₹77,752 Cr | ₹6,911 Cr | 10.9% | 17.9% | 53.6 | ₹3.7 Lakh Cr |
| Shree Cem | ₹19,282 Cr | ₹1,117 Cr | 6.7% | 20.4% | 101.9 | ₹1.13 Lakh Cr |
| JK Cement | ₹12,424 Cr | ₹917 Cr | 14% | 17.9% | 54.1 | ₹49,617 Cr |
| Sagar | ₹2,258 Cr | ₹-217 Cr | -2.2% | 6.2% | NA | ₹3,525 Cr |
TL;DR:
Sagar is small, bleeding, and leveraged. But it’s also trading at a deep discount.
12. Miscellaneous – Shareholding, Promoters
| Category | % Holding (Jun 2025) |
|---|---|
| Promoters | 48.33% (27% pledged) |
| FIIs | 2.63% |
| DIIs | 17.87% |
| Public | 31.16% |
- Pledge = Yellow flag
- Public = Loyal but bruised
- FII = Dipping toes
- Promoters slowly increasing stake (from 45.2% in FY23)
13. EduInvesting Verdict™
Sagar Cements is that student who failed every subject last year but just topped in Physics. A turnaround may be real — but we need to see 2–3 consistent quarters of profit and margin discipline.
If it sustains: rerating + rerolling
If not: back to the dust pile of mid-cap cement
This is still a play on hope, demand, capex execution, and not burning the clinker (or cash).
Metadata
– Written by EduInvesting Team | 21 July 2025
– Tags: Sagar Cements, Cement Stocks, Q1 FY26, Infra, Capex, Turnaround Story
