SAGCEM - Sagar Cements

📊 NSE: SAGCEM 🏢 Cement - South India 📅 Last Updated: 12/14/2025 12:37

💰 Financial Performance

Revenue Growth by Segment

Not disclosed in available documents, but overall profitability declined significantly with a loss after tax of INR 41.92 Cr in Q2 FY26 compared to a loss of INR 34.88 Cr in Q2 FY25.

Geographic Revenue Split

Not disclosed in available documents, though operations are concentrated in Andhra Pradesh (Dachepalli, Mattampally) and Madhya Pradesh (Jeerabad).

Profitability Margins

Net Profit Margin deteriorated from (2.08)% in FY24 to (9.91)% in FY25. Operating Profit Margin fell from 10.00% to 6.00% in the same period due to lower selling prices.

EBITDA Margin

Operating EBITDA per ton was INR (247) in Q2 FY26, an improvement from INR (680) in Q1 FY26, but significantly lower than the INR 372 achieved in Q2 FY25.

Capital Expenditure

Capital expenditure for the half-year ended September 30, 2025, was INR 138.15 Cr, primarily directed toward the Jeerabad grinding plant and preheater upgrades.

Credit Rating & Borrowing

Total consolidated borrowings increased by 12.7% to INR 1,609.50 Cr as of September 30, 2025, from INR 1,428.00 Cr in March 2025. Finance costs rose 16% YoY to INR 20.91 Cr in Q2 FY26.

⚙️ Operational Drivers

Raw Materials

Clinker and Limestone. Clinker inventory adjustments significantly impacted profitability during plant shutdowns.

Capacity Expansion

Jeerabad grinding plant adding 0.5 MTPA capacity, expected to commission before March 2026. Dachepalli plant kiln shut for new preheater commissioning in Q2 FY26.

Raw Material Costs

Not disclosed as a specific % of revenue, but inventory adjustments and clinker consumption from stock during shutdowns impacted the EBITDA per ton by approximately INR 27.

Manufacturing Efficiency

Capacity utilization metrics not disclosed, but efficiency was hampered by maintenance shutdowns and kiln upgrades, leading to negative EBITDA per ton of INR (498) for H1 FY26.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth will be driven by the commissioning of the 0.5 MTPA Jeerabad grinding plant by March 2026, which is expected to contribute to volumes starting Q1 FY27. The company is also upgrading the Dachepalli plant with a new preheater to improve operational efficiency.

Products & Services

Cement bags and Clinker.

Brand Portfolio

Sagar Cements.

Market Expansion

Expansion into the Madhya Pradesh region via the Jeerabad plant to capture local demand.

🌍 External Factors

Industry Trends

The industry is shifting toward ESG compliance; SAGCEM renamed its committee to Risk Management & ESG Committee in July 2024 to align with these trends.

Competitive Landscape

Facing intense pricing competition, particularly in the non-trade segment where price declines were more significant.

Competitive Moat

Moat is based on being a 'preferred brand' for customers in its core southern and central Indian markets, though this is currently challenged by industry-wide pricing pressure.

Macro Economic Sensitivity

Highly sensitive to infrastructure spending and the Indian cement industry's potential for sustainable development.

Consumer Behavior

Shift in demand between trade and non-trade segments affecting overall realization.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with SEBI Listing Regulations (Regulation 17, 18, 21) and Section 177 of the Companies Act regarding audit and risk management oversight.

Environmental Compliance

ESG compliance is managed by the newly renamed Risk Management & ESG Committee; specific costs not disclosed.

Taxation Policy Impact

Tax expenses were zero in H1 FY26 due to losses, compared to a tax expense of INR 22.40 Cr in H1 FY25.

Legal Contingencies

122 investor complaints were received in FY25, primarily regarding non-receipt of dividend warrants (84) and securities (25); all were resolved with zero pending cases as of March 31, 2025.