Sagar Cements is in focus after the company posted a strong set of first quarter numbers. Net realisations grew by 9 percent on a sequential basis, while optimisation of operating expenses contributed to a strong performance. Revenues were up 48.9 percent at Rs 393 crore versus Rs 264 crore for the same quarter last fiscal. The year-on-year (YoY) operating profit was up 24 percent at Rs 107.6 crore versus Rs 86.86 crore in the year- ago period. However, YoY margins were down 27.4 percent.

Throwing light on the quarterly earnings and the pricing outlook Sreekanth Reddy, Joint MD, Sagar Cements told CNBC-TV18, “In some of the markets that we operate, there has been a slight correction. If you have to compare Q1 to Q4, there has been an increase from Q4 to Q1 and from Q1 to Q2. I think it's more of seasonal correction in some of these other markets, except for the eastern market, where the correction is a lot more severe over the last few weeks.”

He said quantifying the correction could be a challenge, because it is work in progress. The drop in the east looks to be anywhere between Rs 15 to 20 per pack.

He further said, “We believe that it's more a seasonal correction being the monsoon months when typically, the demand doesn't shape up the way you want it to.”

Talking about their volume targets, he said, “Last year, we did close to 3.2 million tonne, which is more or less very flattish as compared to the year before. This year, we think, we should end up doing 3.6 million tonne. Out of the 3.6 million tonne, we think, for the markets that we are already servicing more or less, we expect it to be flat because of the second Covid wave. So we are expecting 0.4 million tonne to be contributed from both the assets, which will become operational before the end of September 2021.”

“However, grinding has already kick-started on August 15 in Madhya Pradesh and the one in Odisha is due for commissioning before end of September,” Reddy further mentioned.

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On EBITDA per tonne, he said, “I think we should be near about Rs 1000 per tonne for sure and the primary reason for that is input costs have been very high. Diesel prices have also been putting pressure on both the input and output trades. At the same time, the material cost has been moving one way up. Therefore, given that scenario, the company expects the realisations to be more or less flat with the input cost probably putting pressure on the EBITDA per tonne.”

For the full interview, watch the video

(Edited by : Dipika Ghosh)

First Published:Aug 20, 2021 3:11 PM IST