Sagar Cements Limited , a prominent player in the Indian cement industry, has reported a robust financial performance for the first quarter of fiscal year 2026. The company's strategic focus on profitability and operational efficiency has yielded positive results, despite the challenges in the cement sector.

Financial Highlights

• Revenue surged by 20% to ₹671.00 crore, compared to ₹561.00 crore in the same quarter last year.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a significant improvement, reaching ₹121.00 crore, up from ₹47.00 crore in Q1 FY25.
• EBITDA margins expanded to 18% from 8% in the corresponding quarter.
• The company achieved an EBITDA per tonne of ₹851.00.
• Profit After Tax (PAT) stood at ₹7.00 crore for the quarter.

Operational Performance

• Sagar Cements reported an 11% year-on-year volume growth.
• The company's various plants operated at different utilization levels:

Cost Management

• Power and fuel costs remained stable at ₹1,450.00 per tonne, compared to ₹1,470.00 per tonne in Q1 FY25.
• Freight costs saw a slight increase to ₹860.00 per tonne from ₹844.00 per tonne in the same period last year.

Financial Position

• Gross debt as of June 30, 2025, stood at ₹1,556.00 crore, with ₹1,179.00 crore as long-term debt.
• The company's net worth on a consolidated basis was ₹1,802.00 crore.
• The debt-equity ratio is at 0.65:1.
• Cash and bank balances were reported at ₹182.00 crore.

Expansion and Future Outlook

• The modernization of Andhra Cement's Dachepalli unit is progressing as scheduled, with commissioning expected by September-October 2025.
• Sagar Cements (M) Private Limited, a subsidiary, has approved the expansion of cement grinding capacity from 1 million to 1.5 million tonnes.
• The company plans to establish a 6-megawatt solar power plant with a capex of ₹140.00 crore.
• Management expects overall volumes to reach around 6 million tonnes for the fiscal year.
• The company anticipates a minimum EBITDA of ₹600.00 per tonne going forward.

Market and Pricing Dynamics

Sreekanth Reddy, Joint Managing Director, commented on the market conditions, stating, "The industry witnessed healthy volume growth, supported by a pickup in infrastructure activities, driven by government spending and improving demand from individual house builders." He also noted that key input prices, particularly power and fuel, remained largely stable.

Regarding pricing, the company observed an increase of ₹50.00 to ₹55.00 per bag in Andhra Pradesh and Telangana markets from March to June, with other markets also showing positive trends.

Incentives and Future Projections

The company received ₹34.00 crore in incentives during the quarter, with an additional ₹12.00 crore expected in the coming quarters. For FY27, Sagar Cements anticipates receiving about ₹23.00 crore in incentives.

In conclusion, Sagar Cements' strong Q1 FY26 performance reflects its resilience and strategic positioning in the cement industry. With ongoing expansion plans and a focus on cost efficiency, the company appears well-prepared to capitalize on the anticipated growth in infrastructure and real estate development in the coming years.

Sagar Cements Limited (SCL) announced that its unlisted material subsidiary, Sagar Cements (M) Private Limited, has approved significant expansion plans for its Jeerabad, Madhya Pradesh facility. The Board of Directors of the subsidiary company gave the green light to two major projects in a meeting held on July 21, 2025.

Grinding Capacity Enhancement

The first project involves expanding the grinding capacity at the Jeerabad plant from the current 1.00 MTPA (Million Tonnes Per Annum) to 1.5 MTPA. This expansion is estimated to cost Rs 120.00 crores and aims to boost the company's production capabilities in the region.

Solar Power Plant Installation

In line with the growing emphasis on sustainable energy solutions in the cement industry, the subsidiary will also implement a 6 MW solar power plant at the same facility. This green energy initiative comes with an estimated price tag of Rs 20.50 crores.

Investment and Funding

The total investment for both projects amounts to approximately Rs 140.50 crores. Sagar Cements (M) Private Limited plans to finance these expansions through a combination of internal accruals and debt.

Strategic Implications

This move aligns with Sagar Cements Limited's broader strategy of enhancing its market presence and operational efficiency. The expansion of grinding capacity is expected to strengthen the company's position in the Madhya Pradesh market and neighboring regions. Meanwhile, the solar power plant underscores the company's commitment to reducing its carbon footprint and optimizing energy costs.

Group Performance Context

The expansion plans come against the backdrop of Sagar Cements Limited's recent financial performance. For the quarter ended June 30, 2025, the group reported:

Management's Perspective

Dr. S. Anand Reddy, Managing Director of Sagar Cements Limited, commented on the company's performance: "We have started the year on a strong note as can be seen from our financials. Volumes for the quarter grew by 11% on a Y-o-Y basis driven by pick up Government spendings, construction sector and housing sector."

He added, "Our focus remains on driving down costs and reinforcing our competitive advantage in cost efficiency. By improving operational performance and integrating more renewable energy, we are poised for steady growth in profitability and margins in the years ahead."

The approval of these expansion projects at the Jeerabad facility demonstrates Sagar Cements' commitment to growth and sustainability, positioning the company to capitalize on the increasing demand in the infrastructure and real estate sectors.