Saurashtra Cement Limited

Basic Materials — Building Materials · NSE

₹50.50+₹0.22 (+0.44%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 Saurashtra Cement Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Saurashtra Cement Limited engages in the manufacture and sale of cement and paints in India. It operates through Cement & Cement Related Products, and Paints segments.

IndustryBuilding Materials

SectorBasic Materials

Employees825

Annual revenue₹1,667 Cr

How does it make money?

Turns over ₹1,667 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 825 employees supports ₹2.02 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin4.0%

Net margin0.9%

Revenue / employee₹2.02 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 1.4% 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.

ROCE1.4%

ROE1.5%

Peer median ROE7.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +2% while net margin moved -164% 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+2%

Margin effect-164%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 0.7% — barely ahead of inflation
✗ Profit fell 45.7% in the latest year

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

37/ 100

Expensive

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

84.2x

2Y Median

41.9x

28 monthly readings · mean 66.2x · range 14.7x–178.2x

Sector Median

36.2x

median of 4 sector peers

⚠️Current valuation is approximately 101% above its 2y median of 41.9x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 132% above the peer median of 36.2x.

vs. its own history

Expensive

41.9x median over 28 months · +101%

vs. sector peers

Expensive

36.2x median of 4 peers · +132%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

84.2x

P/B

0.59x

EV/EBITDA

8.8x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 1.0% to 4.0% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from -2.5% to 1.5%.
Return on capital is rising
ROCE has improved from -2.1% to 1.4%.
Very low debt
Debt/Equity of 0.11x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention4

Debt is rising
Total debt is up 62% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 29% against revenue growth of 2% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 37% against revenue growth of 2% — stock may not be moving.
Valuation above its historical average
At 84.2x the stock trades 101% above its own median of 41.9x.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 62% over 3 years, from ₹66 Cr to ₹107 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.8x — little room if earnings dip.
🟡Receivables growing faster than salesFinancial
Receivables up 29% against revenue up 2% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 37% against revenue up 2% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 96% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 1.0% to 4.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹7 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 29% against revenue up 2%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 101% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 0.7% 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.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

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

1EBITDA margin holds above 2%✓ 4.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ 1.8x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 4% a year✗ 0.7% CAGR
Latest reported year was 7.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹7 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

5 / 11 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹562 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

84.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.59x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.6

Profitable

Profitable on a per-share basis

ROE

1.5%

Weak

Weak capital efficiency

ROCE

1.4%

Weak

Low return on total capital employed

Debt/Equity

0.11x

Low

Conservative leverage

Revenue Growth (YoY)

7.8%

Modest

Modest growth

Profit Growth (YoY)

-45.7%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

₹7 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹50.5

Operating Margin

2.1%

Weak

Thin margins leave little room for error

Net Margin

0.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.20

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.25

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

52.1 / 55.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

25.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,635 Cr	₹1,769 Cr	₹1,541 Cr	₹1,667 Cr	+0.7%
EBITDA	₹17 Cr	₹164 Cr	₹59 Cr	₹67 Cr	+58.1%
EBITDA Margin	1.0%	9.3%	3.8%	4.0%	—
PAT (Net Profit)	-₹22 Cr	₹57 Cr	₹7 Cr	₹14 Cr	—
EPS	₹-1.99	₹5.1	₹0.63	₹1.3	—
ROE	-2.5%	6.1%	0.7%	1.5%	—
ROCE	-2.1%	9.2%	2.3%	1.4%	—
Total Debt	₹66 Cr	₹85 Cr	₹136 Cr	₹107 Cr	+17.5%
Free Cash Flow	-₹17 Cr	₹87 Cr	-₹56 Cr	₹7 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.7% a year).

🟢 EBITDA has grown at 58.1% a year over 3 years.

🟢 EBITDA Margin has risen from 1.0% to 4.0% over 3 years (+3.0 pts).

🟢 PAT (Net Profit) has turned positive, from -₹22 Cr to ₹14 Cr.

🟢 EPS has turned positive, from ₹-1.99 to ₹1.3.

🟢 ROE has risen from -2.5% to 1.5% over 3 years (+4.0 pts).

🟢 ROCE has risen from -2.1% to 1.4% over 3 years (+3.5 pts).

🔴 Total Debt has grown at 17.5% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹17 Cr to ₹7 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,588 Cr

Total Liabilities

₹626 Cr

Total Debt

₹107 Cr

Cash & Equivalents

₹79 Cr

Operating Cash Flow

₹36 Cr

Capex

-₹29 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.5%

Corporate Actions

Ex-Dividend Date

14 Aug 2024

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

1 mixed1 negative4 general

Saurashtra Cement (SAURASHCEM.NS) Slips 2.81% to ₹53.0 as Stock Drifts Toward Lower Support - Fibonacci Fan

https://www.siam.in/, 04 Oct

Saurashtra Cement Q1 Standalone Net Profit Drops To 92M Rupees Vs 168M YoY

Sahi, 06 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Saurashtra Cement Ltd. Share Price: Significant 9.81% Gain

Univest, 05 Aug

Sebi exempts Juhi Chawla-owned Mehta Family Trust from Saurashtra Cement open offer

The Economic Times, 14 Jul

Saurashtra Cement appoints Ms. Sonali Sanas as Paints Division CEO effective Aug 16, 2026

scanx.trade, 19 Jun

Saurashtra Cement Share Price Target 2026: Rs 69.8 Analyst Forecast

Univest, 26 JunAnalyst view

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

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 QualityWeak8.7/20

🟡Financial HealthAdequate11.7/20

🔴GrowthWeak7.6/20

🟡ProfitabilityModerate7.1/15

🔴ValuationDemanding6.2/15

🔴RiskHigh4.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 2%4.0%
✗Interest cover stays above 3x1.8x
✗Revenue growth stays above 4% a year0.7% CAGR
✓Free cash flow remains positive₹7 Cr
✓Debt / EBITDA stays below 2x1.6x