Published on 11/09/2019 11:46:58 AM | Source: Reliance Securities Ltd

Buy Sagar Cements Ltd For Target Rs.800 - Reliance Securities

Posted in Broking Firm Views - Short Term Report| #Cement Sector #Sagar Cements Ltd #Trading Report #Reliance Securities Ltd

* Sagar Cements (SAGCEM) gained over ~3% in last trade on the expectation of likely price recovery in its key AP and Telangana markets.

* A sharper-than-expected improvement in average realisation along with steady growth in sales volume had aided SGC to report a strong 116% YoY growth in EBITDA to Rs786mn in 1QFY20. Consolidated EBITDA/tonne improved to Rs959 vs. Rs492 in 1QFY19 and Rs654 in 4QFY19.

* We believe a firm pricing environment, production ramp up from new plants, commissioning of 18 MW CPP and further ramp-up in WHRS capacity and hydel power are likely to aid its performance in subsequent quarters.

* Further, geographical diversification in Central region and higher blended cement bode well for SAGCEM in the long-run.

* We maintain our fundamental BUY rating on the stock with a Target Price of Rs800.


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