Saurashtra Cement Q1FY26 – “Cementing Losses, Painting Hopes: PE 143x for 0.23% ROE – The Real Estate Joke Writes Itself”
1. At a Glance
Saurashtra Cement Ltd (SCL), part of the Mehta Group, trades at ₹108, giving it a market cap of ₹1,195 Cr. The company posted FY25 sales of ₹1,575 Cr and a measly PAT of ₹8.4 Cr, implying a PE ratio of 143x – yes, you read that right. Book value sits at ₹85, dividend yield at 1.86%, and ROE is a microscopic 0.23%. Quarterly numbers look deceptively better: Q1FY26 revenue ₹424 Cr, PAT ₹16.8 Cr (+71% YoY). Stock is up 43% in 6 months, but down 16% in one year. In short – the cement bags are heavy, but the profits are anorexic.
2. Introduction
Cement stocks usually trade like reliable but boring “infrastructure proxies.” You build roads, bridges, housing, and voilà – cement demand goes up. But then there’s Saurashtra Cement, which decided to moonlight as a paint company too (Snowcem). Unfortunately, their paints don’t paint profits either.
Imagine going to a gym for 10 years and still not being able to lift the bar – that’s SCL’s financial performance. The company has been around since 1956, yet its ROE is the kind of number you’d expect from a fixed deposit gone wrong.
Still, the company is certified ISO everything (9001, 14001, 45001). Because when profits are missing, at least certifications keep the boardroom walls decorated.
Reader question: Would you pay 143x earnings for a company with a net margin of 0.14%? Or is this just proof that cement fumes are addictive?
3. Business Model – WTF Do They Even Do?
SCL makes and sells cement under the brand names Hathi and Sidhee, which are household names in Gujarat and nearby states. Their range includes:
PPC, OPC (53 Grade), and PSC cements.
Distribution via road, rail, and sea, serving Gujarat, Maharashtra, MP, Rajasthan, and India’s West Coast.
Paints under the Snowcem brand – a legacy name that your father may remember from 90s advertisements.
New launches include Hathi Prime PPC, wall putty, and paints like “OutWeather” (exterior emulsion) and “SnowCoat.” Basically, they’re trying to be Asian Paints + Ultratech’s poor cousin rolled into one.
The problem? Cement = 95% revenue, paints = 2%, clinker = 3%. So the diversification is more cosmetic than real.
4. Financials Overview
Source table
Metric
Latest Qtr (Q1FY26)
YoY Qtr (Q1FY25)
Prev Qtr (Q4FY25)
YoY %
QoQ %
Revenue (₹ Cr)
424
386
478
10%
-11%
EBITDA (₹ Cr)
35
23
53
52%
-34%
PAT (₹ Cr)
16.8
9.8
33.0
71%
-49%
EPS (₹)
1.51
0.89
2.96
70%
-49%
Commentary: Quarterly swings are like Virat Kohli’s form – glorious one match, duck the next. Annualised EPS ~₹6 → forward PE ~18x, but TTM PE still 143x because FY25 was a disaster.
