Sagar Cements (SAGCEM)

FairStock Score: 1/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 48.33% aligns management with minority shareholders.
• Book value of ₹127.44 provides some tangible asset backing.
• Sales growth of 4.73% is positive even in a weak demand environment.
• Debt/Equity of 0.93 is moderate and not excessive for an industrial company.

Concerns

• Latest quarter net loss of ₹64 Cr, with negative ROE and ROCE of about -2.4%.
• P/E of 0.00 is meaningless without earnings; price at ₹185.51 is at a premium to book value of ₹127.44.
• Piotroski F-Score of 3/9 indicates weak operational and financial health.
• No dividend yield and profit growth of -4.56% offer no income or earnings momentum.

AI Analysis

As an investor, I ask one simple question: what will this asset deliver in future rupees? Sagar Cements gives me no answer. In the latest quarter, it booked sales of ₹591 Cr but lost ₹64 Cr. Returns are deeply negative—ROE is -2.42% and ROCE is -2.19%. This is capital destruction, not compounding. The P/E of 0.00 is a red flag, not a value signal; there is no 'E' to place in the multiple. The stock trades at ₹185.51 against a book value of ₹127.44, so I am paying a 45% premium to tangible assets that are earning negative returns. That offers little margin of safety. Cement is a cyclical, regional commodity. Without evidence of low-cost leadership or pricing power, I cannot assign a durable moat here. Sales grew only 4.73%, while profit declined 4.56%. This tells me demand is tepid and costs are squeezing margins. The Piotroski score of 3/9 confirms a deteriorating financial position. Debt/equity of 0.93 is not terrible, but in a loss-making business with no dividend yield, leverage is a burden, not a benefit. What do I like? Promoter holding of 48.33% is meaningful and aligns owners with minority shareholders. Book value exists at ₹127.44, but it is not enough. I want a large discount, not a premium, when profitability is absent. The 52-week range of ₹148.70 to ₹299.40 shows the market has repriced the stock, but a collapsing price alone doesn't make a bargain. If this is a cyclical trough, then patience might be rewarded—but I need evidence: a return to positive quarterly profits, higher capacity utilisation, falling input costs, or an improving F-score. Until then, this remains in the 'too hard' pile. Graham taught me to buy with a margin of safety. Sagar Cements fails that test today.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer