The stock has increased by 201.45 % in the last year, while the S&P BSE Sensex has increased by 58.82%.
The stock price increased after the company announced stock split plan.
“The board of directors of the Company is scheduled to meet on July 01, 2021, inter-alia, to consider a proposal to sub-divide (split) the face value of the Company’s equity shares from Rs.10 each into an appropriate amount,” Sagar Cements said in an exchange filing.
In general, a company intends to conduct a stock split in order to make its shares more affordable to small retail investors and increase liquidity.
Meanwhile, rating agency India Ratings and Research upgraded Sagar Cements’ (SCL) long-term issuer rating to ‘IND A’ from ‘IND A-‘ with a positive outlook on June 10, 2021.
SCL reported an EBITDA of Rs.400 crore in FY21, which was significantly higher than expected (FY20: Rs.186 crore). While the company’s volumes fell by 32% year on year (YoY) in Q1FY21 due to the impact of the Covid-19-led disruptions, they recovered quickly in the following quarters, growing by 2% YoY, 13% YoY, and 22% YoY in Q2FY21, Q3FY21, and Q4FY21, respectively.
SCL’s EBITDA/ton sequentially moderated to Rs.1019 in 4QFY21 from Rs.1450-1550 levels in 1HFY21 due to a decline in prices along with an increase in input costs.
SCL intends to merge with its wholly owned subsidiary Sagar (R), for which board approval was received in April 2021. This is likely to result in a simpler structure, which will result in lower operational and administrative costs, modest operational synergies, and easier statutory compliance.
The company is also planning to merge with Jajpur Cement, in which it owns a 100% stake.
At its meeting on May 12, 2021, the Board recommended to the shareholders a dividend of 6.50 per equity share of 10 each (65%) on the Company’s 2.35 cr equity shares, which includes an interim dividend of 4 per equity share (40%) already paid during the fiscal year 2020-21.
Sagar Cements Limited was founded in 1981 with the objective of manufacturing cement. On January 26, 1985, the actual commercial journey began with a production capacity of 66,000 tonnes of OPC per year at Mattampally, Nalgonda – Hyderabad.
Sagar Cements Limited is one of the state of Andhra Pradesh’s most modern mini cement plants. One of the company’s strengths is its use of the most sophisticated cutting-edge technology.
Disclaimer: This document and the process of identifying the potential of a company has been produced for only learning purpose. Since equity involves individual judgments, this analysis should be used for only learning enhancements and cannot be considered to be a recommendation on any stock or sector.