Synopsis: A small-cap Cement infrastructure stock is in focus after announcing their management has given the future outlook of the company.
A small cap company that is engaged in the business of manufacture and sale of cement is in the spotlight following the announcement of its capex and capacity guidance for FY26 in their Q2 results. The article below provides a detailed overview of the company’s performance and future outlook.
With a market capitalization of Rs. 2,830.99 crore, the shares of Sagar Cement Limited were trading at Rs. 216.59, up by 0.12 percent from its previous closing price of Rs. 216.34. In today’s trading session it has touched an intraday high of Rs. 218 per equity share.
Q2 Results
Sagar Cements Limited reported Rs. 601.86 crore in revenue for the second quarter of FY26, a 26.7 percent increase over the Rs. 475.12 crore for the same period in FY25. But it decreased by 10.3 percent as compared to Rs. 670.66 crore in Q1 FY26.
The company’s EBITDA for Q2 FY26 stood at Rs. 51.33 crore, down by 57.72 percent from Rs. 121.45 crore in Q1 FY26, and inclined by 157.5 percent from Rs. 19.93 crore in Q2 FY25.
The consolidated net loss for the second quarter of FY26 was Rs. 44.17 crore, as compared to loss of Rs. 56.98 crore in Q2 FY25. The company reported net profit of Rs. 7.49 crore in Q1 FY26.
Capex Guidance
Sagar Cements has increased its FY26 capex plan to approximately Rs. 450 crore from the earlier Rs. 360 crore, mainly due to faster project execution. Around Rs. 180 crore has already been spent during H1 FY26, with the remaining Rs. 250 crore earmarked for H2. For FY27, the company has guided a capex of Rs. 250–275 crore, which includes maintenance-related expenditure.
EBITDA Guidance
The company remains confident about its profitability outlook despite softer Q2 performance and has reiterated its guidance of achieving Rs. 600 EBITDA per tonne for FY26. Management expects sustained improvement supported by capacity utilisation, energy savings, and operational efficiencies.
Capacity Guidance
Sagar Cements Limited’s total installed capacity is expected to increase from the current ~10.5 MTPA to ~12 MTPA by end-FY27, driven by expansions at Jeerabad and Dachepalli. The Gudipadu 0.25 MTPA expansion has not yet commenced and is excluded from the guidance. At Dachepalli, the new 6-stage preheater commissioned on 23 October 2025 is projected to reduce energy consumption by nearly 100 Kcal. The plant is expected to break even at 50 percent utilisation, with FY27 utilisation targeted at ~60 percent, delivering Rs. 500–600 EBITDA per tonne subject to realisations.
Project Updates
- Dachepalli Plant Upgrade: The upgraded preheater system is expected to significantly improve efficiency. During Q2, clinker production remained halted due to the shutdown, with plant utilisation at 32 percent.
- Gudipadu WHRS: The 4.35 MW Waste Heat Recovery System is scheduled for completion by end-FY26. The total project cost is guided at Rs. 18–20 crore/MW, equating to ~Rs. 84 crore including GST and IDC.
- Jeerabad Expansion: Capacity expansion from 1.0 MTPA to 1.5 MTPA is underway and is expected to be commissioned before March 2026. As a grinding unit, management estimates a fast ramp-up timeline with immediate volume benefits.
Incentives
The company has already received all FY26 incentives amounting to nearly Rs. 46 crore, with Rs. 34 crore received in Q1 and Rs. 11 crore in Q2. For FY27, Sagar Cements expects a minimum of Rs. 25–26 crore in incentives, along with an additional Rs. 3–5 crore in power-related incentives.
Volume Outlook
Sagar Cements has maintained its FY26 volume guidance of ~6 MTPA. For FY27, the earlier outlook of around 7 MTPA is likely to be revised upward, given strong progress in capacity expansion, improved operational visibility, and anticipated demand traction.
About the Company
Sagar Cements Limited, incorporated in 1981 and based in Hyderabad, manufactures and sells various types of cement in India, including ordinary Portland, Portland Pozzolana, sulphate-resistant Portland, composite, and Portland slag cement, along with ground granulated blast furnace slag.
As of September 2025, the company’s shareholding pattern shows that promoters hold 48.33 percent of the total equity, Foreign Institutional Investors (FIIs) hold 2.84 percent, while Domestic Institutional Investors (DIIs) own 17.39 percent. The public shareholding stands at 31.42 percent, reflecting a healthy level of retail participation in the company.
Written by: Akshay Sanghavi
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