Mehabe score: 7 G Factor: 6 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 6 and Piotski score of 7.
Description
Sagar Cements is engaged in the business of manufacture and sale of cement.
Main Points
Manufacturing Capacities #
Cement 5.75 MTPA
Captive Power Plants 61.55 MW
Locations:
Gudipadu, AP – 1.25 MTPA and 25 MW
Bayyavaram, AP – 1.50 MTPA and 8.42 MW
Mattampally,Telangana – 3.00 MTPA and 28.13 MWSite:SAGCEMMain Symbol:SAGCEM
Stock trades at 1101.0, above its 50dma 932.91. It also trades above its 200dma 747.74. The stock remains bullish on techicals
The 52 week high is at 1195.00 and the 52week low is at 320.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 33.19% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 22.20%
-Debtor days have improved from 34.65 to 26.81 days.
Weakness
– has a low return on equity of 8.31% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 16.1x. The Ramco Cement trades at the industry’s max P/E of 31.1x. SAGCEM trades at a P/E of 13.9x
– Industry’s mean G-Factor is 5.4 while the mean Piotski score is 9.0. SAGCEM has a G-Factor of 6 and Piotski scoreof 7.
– Average 1 month return for industry is 15.8%. The max 1- month return was given by K C P: a return of 41.49 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 418.0 cr compared to Rs 304.0 cr for period ended Mar 2020, a rise of 37.5%
Operating Profits reported at Rs 104.0 cr for period ended Mar 2021 vis-vis 45.0 for period ended Mar 2020 .
Operating Margins expanded 1007.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 21.26 compared to Rs 21.14 for previous quarter ended Dec 2020 and Rs 0.58 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1371.0 cr for period ended Mar 2021 vis-vis sales of Rs 1175.0 cr for the period ended Mar 2020, a healthy growth of 14.3%. The 3 year sales cagr stood at 9.7%.
Operating margins expanded to 29.0% for period ended Mar 2021 vis-vis 16.0% for period ended Mar 2020, expansion of 1300.0 bps.
Net Profit reported at Rs 186.0 cr for period ended Mar 2021 vis-vis sales of Rs 27.0 cr for the period ended Mar 2020, rising 85.5%.
Company recorded a healthy Net Profit CAGR of 92.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 377.0 cr for period ended Mar 2021 vis-vis Rs 202.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 17.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 191% on a 1 Year basis vis-vis a return of 12% over the last 3 Years. – The compounded sales growth on a TTM bassis is 17% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 596% vis-vis a compounded profit growth of 92% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 3.24% vis-vis 2.98% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 34.72% vis-vis 34.66% for Dec 2020
Conclusion
– has delivered good profit growth of 33.19% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 22.20%
-Debtor days have improved from 34.65 to 26.81 days. – has a low return on equity of 8.31% for last 3 years.
– might be capitalizing the interest cost
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 932.91 and is trading at 1101.0, thus bullish price action wise.
