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G Naga Sridhar
Sagar Cements Ltd is ramping up production capacity significantly to reach 8.25 million tonnes per annum by end of December.
“With the opening of a plant in Madhya Pradesh a few weeks ago, our total cement production capacity increased from 5.75 million tonnes to 6.75 million tonnes. With the commissioning of another plant in Odisha next month, we should be reaching 8.25 million tonnes,’’ Sreekanth Reddy, Joint Managing Director, Sagar Cements, told BusinessLine .
The Hyderabad-based company has invested ₹600 crore and ₹305 crore in the plants in Madhya Pradesh and Odisha respectively.
In the last week of October, Satguru Cement Private Limited, a subsidiary of the Hyderabad-based company, commenced the clinkerisation process at its newly implemented integrated cement plant of one million tonnes capacity in Madhya Pradesh.
“This, along with Odisha project, which is expected to be commissioned by middle of December, will not only help us improve our volume growth during the second half of the current financial year, but will also help us in rationalising our freight expenses and diversifying our sales outside existing markets,’’ Reddy said.
Steady demand
In the second quarter ended September 30, Sagar Cements posted revenue growth of 13 per cent over the previous year. Revenue growth was largely owing to the strong underlying demand in housing and infrastructure activities across key markets. Realisations were largely stable on the back of steady demand.
It’s net profit declined 59 per cent at ₹20.76 crore in the second quarter compared to ₹50 crore in the corresponding quarter of the previous financial year, owing to rising input costs.
According to Reddy, a judicious mix of domestic coal and positive operating leverage helped the company deliver 16 per cent margins during the quarter. The company is ‘hopeful’ that resumption of commercial and economic activities following the decline in the Covid cases and conclusion of monsoon season, will result in a better pricing environment for the business.
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