3 SAGCEM share price target reports by brokerages below. See what is analyst's view on SAGCEM share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
While private demand could be weak and recovery could be prolonged, government spending, like what has been promised by the Andhra Pradesh government could provide cushion to falling demand. Furthermore, Sagar Cements is currently available at an FY20 EV/t of $30, implying a considerable margin of safety to the replacement cost of $100-110. We, thus, maintain BUY rating but keep our upside limited maintaining caution. We value the company at 8x FY22E EV/EBITDA to arrive at a TP of Rs 350.
Sagar Cements’ profitability is expected to remain healthy led by costoptimisation measures. The company already has and is further setting up capacities to cater to the eastern region, which should drive growth, going ahead. Despite debt additions, debt/EBITDA is not expected to increase and remain stable around 3x. Thus, we maintain BUY rating on Sagar Cements valuing it at 9x FY21E EV/EBITDA to arrive at a target price of Rs 700/share (implying EV/t of $70 per tonne).
Outlook remains positive on account of government’s planned infrastructure projects including road construction, PMAY –U/A, irrigation projects. The strong demand in Q1FY20 despite issues related to sand-mining, water crisis, delayed payments to contractors and steady volumes and stable prices on another side have signaled an improved sentiment. The current quarter is a seasonally weak quarter and prices have softened along with the volumes as against the previous quarter. Nevertheless, with the long-term horizon, we maintain our positive outlook for the company and assigning an EV/EBITDA multiple of 7.0x on FY21E, we arrive at a target price of Rs.772 per share which is ~25% upside from current levels.
Led by expectations of stable realisations post Q3FY20E and rationalisationof costs, Sagar Cements’ profitability is expected to remain healthy. Also, the company would be raising debt for funding expansion. However, debt/EBITDA is expected to remain at comfortable levels of ~3.1x. Thus, we maintain BUY rating on the company valuing it at ~9.5x EV/EBITDA and arrive at a target price of Rs 800/share (implying EV/t of $76/tonne).
Robust realisation was the sole factor for stronger performance in 1QFY20, while we expect this to cool off a bit in the current quarter due to sharp correction in realisation especially in AP and Telangana markets. However, commissioning of 18MW CPP in Aug’19, likely improvement in realisations post monsoon and complete synergies from Bayyavaram SGU are likely to aid its operating performance in subsequent quarters. We reiterate our BUY recommendation on the stock with a revised Target Price of Rs800 (8x of FY21 EBITDA).
We believe a sustained pricing environment in Southern markets, recent recovery in Eastern realisation, commissioning of 18 MW CPP and further ramp-up in WHRS capacity and hydel power are likely to aid its performance in subsequent quarters. Further, geographical diversification in Central region and higher blended cement bode well for SGC in the long-run. At CMP, the stock trades at 7.1x and 7.2x EBITDA of FY20 and FY21, respectively which appear to be attractive, in our view. Hence, we maintain our BUY recommendation on the stock with a revised Target Price of Rs740 (8x of FY20 EBITDA).
We have now valued SGC at a replacement cost of Rs3.0bn/mt (March 2021 capacity factoring in the expansion), ~60% discount to the replacement costs to arrive at its fair value. We have maintained Accumulate rating on the stock with a revised target price of Rs685 (from Rs692 earlier). At our target price, the stock trades at EV/EBITDA of 9.5x (9.7x earlier) March 2021 estimated earnings.
With limited clinker based additions expected to come up in the southern region in relation to the strong traction of cement consumption backed by IHB segment, real estate and infrastructure spends, increasing presence in the east led by ramping up of the Vizag unit, we believe the company would be able to grow at a healthy pace. Hence, we maintain our BUY rating on the stock with a target price of | 800 per share at 9.7x FY21E EV/EBITDA (EV of $67/tonne).
Sagar generates ~50% of its sales from Andhra Pradesh and Tel- angana. Sagar has been diversifying its market reach by entering into new regions, focus on improving P&F cost (WHRS capacity augmented to 8.8MW), 18MW CPP addition at its Mattampally plant (expected to start by March 2019E) coupled with rationalization of lead distance post the grinding unit capacity enhancement at Bayyavaram which will go a long way in improving the operating performance in the medium term. At CMP Sagar is trading at $52 FY20E EV/T. We maintain BUY rating on the stock with a Target Price of INR 962/share (valuing at average of FY21E EV/EBITDA of 9.0x & EV/Ton of USD $35).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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