Sagar Cements (502090) Corporate Presentation summary

Corporate overview and strategy

• Established in 1985, Sagar Cements operates 10.5 MTPA capacity, with a strong presence in South India and expanding into East and Central regions.

• Facilities are fully integrated and automated, with major plants in Telangana, Andhra Pradesh, Odisha, and Madhya Pradesh.

• Distribution network includes 3,146 dealers and 7,371 sub-dealers, with a trade to non-trade channel mix of 53:47.

• Vision is to double capacity every 10 years, targeting 20 MTPA by 2035 through organic and inorganic growth.

• Proven M&A track record, including recent acquisition of Andhra Cements, enhancing southern market position and resource base.

Operations, resources, and expansion

• Limestone reserves exceed 395 mn tons at Mattampally, 165 mn at Gudipadu, 68 mn at Indore, and 316 mn at Dachepalli.

• Group captive power generation totals ~97 MW, including thermal, solar, hydro, and waste heat recovery plants.

• Ongoing capex includes expansion at Gudipadu and Jeerabad plants, and green power capacity increases at Dachepalli.

• Strategic expansion leverages proximity to coal mines, ports, and key markets, with average lead distance below 300 km.

• Upgradation at Dachepalli to raise clinker capacity to 2.31 MTPA and cement capacity to 3 MTPA by FY26, with ₹470 Cr capex.

Financial performance and capital structure

• Total income rose to ₹2,559 Cr in FY24, with capacity utilization at 53% and installed capacity at 10.5 MTPA.

• Q1 FY25 sales volume grew 9% YoY to 1.28 mn tons, with EBITDA margin improving to 8% and EBITDA per ton at ₹356.

• Net worth increased over 4x in the last decade; long-term debt rating is IND A/Negative.

• Gross debt as of June 2024 stands at ₹1,439 Cr, with net debt at ₹1,298 Cr and a long-term debt-equity ratio of 0.61.

• Shareholding as of June 2024: Promoters 31.96%, Institutions 19.73%, Non-institutions 48.31%.