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ICICI Direct Report
Sagar Cements Ltd. reported a robust performance with Ebitda, profit after tax growth of 10%, 22%, respectively, in a challenging Q1 FY21.
The results were ahead of our estimates mainly on account of a sharp increase in cement prices in Andhra Pradesh, Telangana aided by lower fuel prices during the quarter.
Revenues fell 23.3% YoY to Rs 264.1 crore (broadly in line with our estimated revenue of approximately Rs 271 crore.
Sharp fall in sales volume (down 32.5% YoY to 0.55 metric tonne was largely offset by a sharp rise in cement prices (up 13.8% YoY, 31.6% QoQ to Rs 4775/t) in AP, Telangana region.
The company outperformed our expectations on the margins, profitability front, reporting Ebitda margins of 32.9% (up 1010 basis points YoY) for the quarter, which is highest ever margins reported so far during the quarter by any cement company.
Drop in petroleum coke prices also helped it to reduce power and fuel cost by 24% YoY to Rs 805/tonne. Capacity utilisation for the quarter was at 37%.
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