Yes, Securities has given a buy rating to Sagar Cements with a target price of Rs 607. The share price moved down by 1.92 percent from its previous close of Rs 495.80. The stock’s last traded price is Rs 486.30. Sagar Cements Ltd., incorporated in the year 1981, is a Small Cap company (having a market cap of Rs 1091.48 Crore) operating in the Cement sector.
Financials For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 264.12 Crore, down 13% from last quarter Sales of Rs 303.57 Crore and down 23.27 % from last year same quarter Sales of Rs 344.20 Crore. The Company reported net profit after tax of Rs 36 Crore in the latest quarter.
Investment Rationale Currently, Sagar Cements is trading at EV/EBITDA of ~6.1x and EV/te of $32 on FY22E. Assigning an EV/EBITDA multiple of 7x on FY22E, the brokerage has a target of Rs 607/share. The brokerage has maintained a BUY rating on the stock.
Key risks: In a scenario of the second wave of Covid‐19 spread, demand and pricing outlook would be severely hampered. Promoter/FII Holdings Promoters held a 50.79 percent stake in the company as of June 30, 2020, while FIIs and DIIs held 33.47 percent and public and others 33.47 percent.