Buy Sagar Cements, target price Rs 305: Emkay Global

Emkay Global has buy call on Sagar Cements Ltd. with a target price of Rs 305. The current market price of Sagar Cements Ltd. is Rs 257.65. Time period given by analyst is one year when Sagar Cements Ltd. price can reach defined target.

Sagar Cements Ltd., incorporated in the year 1981, is a Small Cap company (having a market cap of Rs 3041.49 Crore) operating in Cement sector.

Sagar Cements Ltd. key Products/Revenue Segments include Cement, Other Operating Revenue, Power and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 335.57 Crore, down -9.67 % from last quarter Total Income of Rs 371.50 Crore and down -8.23 % from last year same quarter Total Income of Rs 365.66 Crore. Company reported net profit after tax of Rs 4.62 Crore in latest quarter.


Investment Rationale
Sagar is likely to register industry-leading volume growth (>20% CAGR over FY22E-24E) thanks to a low base, cyclical volume upturn and capacity expansion. Besides, the company is set for a structural improvement in return ratios, aided by improving margins and rising asset turnover.

Promoter/FII Holdings
Promoters held 50.28 per cent stake in the company as of 31-Dec-2021, while FIIs owned 5.8 per cent, DIIs 8.96 per cent.