At a Glance
Sanghi Industries reported a Q1 FY26 loss of ₹75.4 Cr despite an exceptional income of ₹40 Cr from indemnity claims. Revenue dropped to ₹245 Cr (-27% YoY), operating margin stuck at 10%, and ROE is a jaw-dropping -46%. The Ambuja merger may be its lifeboat, but right now it’s sinking like a bag of cement in water.
Introduction
Imagine trying to swim with a cement bag tied to your leg—welcome to Sanghi’s financial life. Once a regional cement player, now posting continuous losses, high debt, and negative margins. Amid all this, Ambuja Cements is coming to the rescue with a merger scheme. Will it save Sanghi or just absorb its problems?
Business Model (WTF Do They Even Do?)
Sanghi Industries is in the cement business, manufacturing:
- Ordinary Portland Cement (OPC) – 66% of revenue
- Portland Pozzolana Cement (PPC) – 33%
- Portland Slag Cement (PSC) – 1%
Markets: Gujarat, Rajasthan, Maharashtra, Kerala + exports to Middle East & Africa.
Essentially, they sell cement, but their financials look more like quicksand.
Financials Overview
- Revenue (Q1 FY26): ₹245 Cr (-27% YoY)
- Net Loss: ₹75.4 Cr
- Operating Margin: 10%
- Exceptional Income: ₹40 Cr (saved from being worse)
- ROCE: -3.9%
- ROE: -46%
Verdict: The numbers scream “merger or bust.”
Valuation
- P/E: Not applicable (loss-making)
- CMP / BV: 2.86×
- Fair Value Range: ₹40–₹70
Market is pricing in Ambuja’s entry, not Sanghi’s performance.
What’s Cooking – News, Triggers, Drama
- Merger with Ambuja Cements: NSE & BSE granted no objections.
- Exceptional Income: ₹40 Cr indemnity claim—one-off boost.
- Investor Meetings: Scheduled 31 July 2025—expect fireworks.
- Debt Burden: ₹2,506 Cr borrowings choking profits.
Drama: Can Ambuja’s capital fix Sanghi’s debt? Or will it be another cemented disaster?
Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 3,710 | 3,628 | 3,733 |
| Liabilities | 3,710 | 3,628 | 3,733 |
| Net Worth | 1,301 | 852 | 354 |
| Borrowings | 1,548 | 2,084 | 2,506 |
Commentary: Debt mountain growing while net worth is eroding.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | -25 | -245 | -249 |
| Investing | 29 | 236 | -128 |
| Financing | -3 | 182 | 225 |
Punchline: Cash flow is like their cement bags—leaking everywhere.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | -31% | -46% | -46% |
| ROCE % | -3% | -5% | -4% |
| PAT Margin % | -35% | -52% | -49% |
| D/E | 0.9 | 2.4 | 2.8 |
Verdict: These ratios aren’t sexy; they’re screaming distress.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 928 | 828 | 969 |
| EBITDA | -14 | -71 | 67 |
| Net Profit | -326 | -449 | -485 |
Commentary: Losses piling up like unused cement stock.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| UltraTech Cement | 77,752 | 6,911 | 52× |
| Ambuja Cement | 35,045 | 4,143 | 36× |
| ACC | 22,743 | 2,335 | 15× |
| Sanghi | 991 | -485 | NA |
Humour: Compared to peers, Sanghi looks like the broke cousin at a rich wedding.
Miscellaneous – Shareholding, Promoters
- Promoters: 75%
- FIIs: 0.3% (nearly vanished)
- DIIs: 0.7%
- Public: 24%
Promoter stake strong, but retail holding is at risk if merger fails.
EduInvesting Verdict™
Sanghi is currently a financial train wreck with mounting losses and crushing debt. The only hope lies in Ambuja’s merger, which could inject capital and operational discipline.
Final Word: For now, it’s not an investment—it’s a merger gamble.
Written by EduInvesting Team | 28 July 2025
SEO Tags: Sanghi Industries, Cement Stocks, Ambuja Merger, Cement Sector, Debt-laden Companies
