Sagar Cements Q1 FY27 Concall Transcript: Volume Growth, Cost Pressures, and Capacity Expansion
Sagar Cements reported Q1 FY27 results with 13% YoY volume growth and 5% revenue increase. The company targets 7 million tons volume for FY27 and expects ₹500-₹550 EBITDA per tonne. Key capacity expansions are underway, and land monetization of ₹150 crore is anticipated pending government approval.
The announcement details operational performance, capacity expansions, and financial metrics for the quarter. The ongoing capacity enhancements and land monetization are significant, but the immediate financial impact is moderate given the scale of operations and market conditions.
The company reported positive volume growth, ongoing capacity expansions, and a clear strategy for cost management and EBITDA improvement. While acknowledging cost pressures, the outlook remains optimistic due to demand drivers and operational initiatives.
Sagar Cements Limited (SAGCEM) held its Q1 FY27 earnings conference call on July 28, 2026. The company reported a healthy volume growth of approximately 13% year-on-year, leading to a 5% increase in revenue, driven by higher volumes while realisations remained broadly stable.
The company anticipates achieving volumes of around 7 million tons in FY2027. Despite a mixed operating environment impacted by heat waves and labor shortages, demand remained healthy, supported by government infrastructure spending and housing activity. Pricing momentum moderated towards the end of the quarter.
Operationally, EBITDA per tonne stood at ₹451 for the quarter. Profitability and margins were moderated due to elevated input prices, particularly in energy and fuel, amid geopolitical tensions. The company expects input cost pressures to ease gradually, supported by ongoing cost optimization initiatives like waste heat recovery systems and plant efficiency improvements.
Key capacity expansions and commissioning of waste heat recovery systems were completed at the Gudipadu and Jeerabad plants. The 0.75 million tonne cement capacity expansion at Andhra Cements is expected to be completed before the end of the current quarter. Power and fuel costs were ₹1,484 per tonne, and freight costs were ₹858 per tonne.
Loss after tax for the quarter was ₹28 crore. Gross debt stood at ₹1,704 crore, with net worth at ₹1,833 crore and a debt-to-equity ratio of 0.78:1. Cash and bank balances were ₹105 crore.
During the Q&A, management confirmed that the 7 million tonne volume target excludes clinker sales. They expect double-digit volume growth for FY2028. The company is targeting ₹500-₹550 EBITDA per tonne for the full year, expecting cost initiatives and stable prices to offset inflation. The monetization of land in Vizag for approximately ₹150 crore is expected within the current year, pending government approval.
Regional demand in South India, particularly in AP and Telangana, remains robust, with Tamil Nadu and Kerala showing positive growth post-elections. Madhya Pradesh and Odisha also show strong growth. The company is working on a new super fine building material product and expects significant savings from waste heat recovery systems, projecting a ₹25 per ton saving on a consolidated basis.
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