Sagar Cements Limited

Basic Materials — Building Materials · NSE

₹136.00−₹1.86 (−1.35%)

DalalBaazaar Score

31 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by moderate debt load, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The company is currently losing money, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Sagar Cements Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sagar Cements Limited manufactures and sells cement in India. It offers ordinary Portland, Portland Pozzolana, sulphate resistant Portland, composite cement, and Portland slag cement, as well as ground granulated blast furnace slag.

IndustryBuilding Materials

SectorBasic Materials

Employees1,207

Annual revenue₹2,573 Cr

How does it make money?

Turns over ₹2,573 Cr a year. Of every ₹100 of sales, about ₹-0 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 1,207 employees supports ₹2.13 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin10.4%

Net margin-0.4%

Revenue / employee₹2.13 Cr

Who are its competitors?

The closest listed comparisons in its industry are ULTRATECH CEMENT LIMITED, GRASIM INDUSTRIES LTD, AMBUJA CEMENTS LTD, SHREE CEMENT LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

ULTRATECH CEMENT LIMITEDP/E 37.6x · ROE 11.1%

GRASIM INDUSTRIES LTDP/E 34.8x · ROE 5.5%

AMBUJA CEMENTS LTDP/E 20.4x · ROE 7.4%

SHREE CEMENT LIMITEDP/E 49.7x · ROE 7.0%

What is its competitive advantage?Little sign of one

Returns on capital of 1.3% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE1.3%

ROE-0.7%

Peer median ROE7.4%

What is the outlook?

5 analysts covering the stock expect revenue to grow about 12.2% and earnings to grow about 169.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.2%

Est. earnings growth+169.9%

Analysts5

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +16% while net margin moved -132% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+16%

Margin effect-132%

DalalBaazaar Score

31/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

27/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

44/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

1.05x

EV/EBITDA

13.0x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 13.7% to 10.4% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on capital is falling
ROCE has declined from 4.9% to 1.3% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 70% against revenue growth of 16% — customers are taking longer to pay.
Short-term liquidity is tight
Current ratio of 0.63 — near-term obligations exceed near-term assets.

Red Flags

6 items require attention · 3 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 0.3x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹11 Cr in the latest reported year.
🔴Receivables growing faster than salesFinancial
Receivables up 70% against revenue up 16% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹208 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 3.3 points over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.63 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 13.7% to 10.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 6.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 70% against revenue up 16%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 5.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 8%✓ 10.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹208 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 0.3x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✓ 5.0% CAGR
Latest reported year was 5.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 4 neutral · 5 weak

Market Cap

₹1,778 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

1.05x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-2.78

Loss-making

Negative earnings per share — the business is losing money

ROE

-0.7%

Weak

Weak capital efficiency

ROCE

1.3%

Weak

Low return on total capital employed

Debt/Equity

0.92x

Moderate

Moderate leverage

Revenue Growth (YoY)

5.3%

Modest

Modest growth

Profit Growth (YoY)

94.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹208 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹136

P/E (Forward)

40.7x

Operating Margin

1.9%

Weak

Thin margins leave little room for error

Net Margin

-1.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.63

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.45

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

146.5 / 155.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

13.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,223 Cr	₹2,498 Cr	₹2,198 Cr	₹2,573 Cr	+5.0%
EBITDA	₹304 Cr	₹235 Cr	₹129 Cr	₹269 Cr	-4.1%
EBITDA Margin	13.7%	9.4%	5.9%	10.4%	—
PAT (Net Profit)	₹30 Cr	-₹43 Cr	-₹210 Cr	-₹11 Cr	—
EPS	₹2.33	₹-3.32	₹-16.58	₹-0.06	—
ROE	1.5%	-2.2%	-12.2%	-0.7%	—
ROCE	4.9%	2.2%	-4.2%	1.3%	—
Total Debt	₹1,479 Cr	₹1,444 Cr	₹1,446 Cr	₹1,708 Cr	+4.9%
Free Cash Flow	₹57 Cr	₹175 Cr	₹96 Cr	-₹208 Cr	—

🟢 Revenue has grown at 5.0% a year over 3 years.

🔴 EBITDA has shrunk at 4.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.7% to 10.4% over 3 years (-3.3 pts).

🔴 PAT (Net Profit) has turned negative, from ₹30 Cr to -₹11 Cr.

🔴 EPS has turned negative, from ₹2.33 to ₹-0.06.

🔴 ROE has fallen from 1.5% to -0.7% over 3 years (-2.2 pts).

🔴 ROCE has fallen from 4.9% to 1.3% over 3 years (-3.5 pts).

🔴 Total Debt has grown at 4.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹57 Cr to -₹208 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,505 Cr

Total Liabilities

₹2,644 Cr

Total Debt

₹1,708 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹216 Cr

Capex

-₹423 Cr

Shareholding (proxy)

Institutional Holding

17.8%

Insider Holding

68.9%

Corporate Actions

Ex-Dividend Date

19 Jun 2024

Analyst Consensus

Recommendations

3 Buy · 2 Hold · 1 Sell

Target Price (Mean)

₹201.17

+47.9% vs CMP

Target Range

₹184 – ₹235

Peer Comparison

Company	P/E	ROE
ULTRATECH CEMENT LIMITED	37.6x	11.1%
GRASIM INDUSTRIES LTD	34.8x	5.5%
AMBUJA CEMENTS LTD	20.4x	7.4%
SHREE CEMENT LIMITED	49.7x	7.0%

Recent News

2 mixed1 negative3 general

Sagar Cements Ltd. 52 Week Low Streak and Valuation View

Univest, 14 Oct

SAGCEM Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Andhra Cements stock jumps over 9% after parent Sagar Cements announces OFS stake sale; check floor price and stock trend

Upstox, 17 MarOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

Sagar Cements Ltd. Peer Comparison – Compare with Others

Value Research, 04 Sept

Andhra Cements Board Approves Merger with Sagar Cements; 1:7 Share Swap Ratio Fixed

Sahi, 05 JunM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Sagar Cements to merge Andhra Cements to boost efficiency

scanx.trade, 05 Jun

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🔴Business QualityWeak4.7/20

🔴Financial HealthStretched6.6/20

🔴GrowthWeak7.6/20

🔴ProfitabilityWeak1.3/15

🟡ValuationFair7.1/15

🔴RiskHigh4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 8%10.4%
✗Debt / EBITDA falls below 3x6.4x
✗Free cash flow remains positive-₹208 Cr
✗Interest cover stays above 3x0.3x
✓Revenue growth stays above 4% a year5.0% CAGR