Q2 2026 Sagar Cements Ltd Earnings Call Transcript
Key Points
- Sagar Cements Ltd (BOM:502090) reported a significant year-on-year volume growth of almost 70% in Q2.
- Revenue for the quarter increased by 87% to INR602 crores compared to INR475 crores in Q2 FY25.
- EBITDA for the quarter improved to INR51 crores from INR20 crores in the prior year period, with margins increasing from 4% to 9%.
- The company is optimistic about future profitability, supported by cost optimization initiatives and increased capacity utilization.
- Expansion projects at Andhra Cement and Jeerabad are progressing as planned, with new capacities expected to be commissioned by the end of FY26.
- Overall demand during the quarter was subdued due to the typical seasonality of the monsoon period.
- Freight costs increased to INR855 per tonne from INR830 per tonne in Q2 FY25.
- The EBITDA per tonne declined to INR377, impacted by inventory adjustments and a 3% to 4% drop in realization.
- Gross debt stood at INR1,610 crores, with a debt-equity ratio of 0.69:1, indicating a significant leverage.
- The company experienced a delay in the Vizag land sale process due to typographical errors in paperwork, potentially affecting cash flow.
(audio in progress) half year ending September 30, 2025. Now let me begin the discussion with a brief overview of the market, post which I will move on to Sagar's specific development.
As I stated, overall demand during the quarter was relatively subdued, reflecting the typical seasonality of the monsoon period. Despite this, we recorded positive volume growth on that of a softer base from last year, environment, pricing environment remain broadly stable with the marginal softening in line with seasonal trends.
On the power front, particularly for power and fuel remained steady through the quarter. Looking ahead, we expect demand conditions to strengthen in the second half of FY26, supported by pent-up consumption and higher government spend.
Moving on to Sagar-specific performance. Q2 registered a volume growth of almost 70% year-on-year, while revenue for the quarter stood at INR602 crores compared to INR475 crores Q2 FY25, an increase of almost 87%. EBITDA for this quarter stood at INR51 crores
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