Shares of Sagar Cements Limited India surged 5 per cent to hit an intraday high of Rs 309 on BSE in an otherwise weak market. The small-cap stock has delivered more than 200 per cent return to its shareholders in the last 12 months.
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In the last one year, the share price jumped from Rs 98.7 to Rs 309 mark – logging around 212 per cent return in this period. In comparison, the Nifty 50 index gained over 44 per cent and the S&P BSE Sensex rose over 45 per cent.
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An amount of Rs 5 lakh invested in this multibagger stock a year ago would have turned into Rs 15.60 lakh today.
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With a market capitalisation of Rs 3,472.71 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
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The company reported a net profit of Rs 51.43 crore for the quarter ended June 2021 compared to a net profit of Rs 36.13 crore in the year-ago period.
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Revenue from operations grew 48.6 per cent to Rs 392.57 crore in the June-ended quarter against Rs 264.12 crore a year ago. The EPS has increased to Rs 21.31 in June 2021 from Rs 16.16 in June 2020.
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According to MarketsMojo, the company has declared positive results for the last 4 consecutive quarters. It has healthy long term growth as operating profit has grown by an annual rate of 44.59%.
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Also, the technical trend has improved from Mildly Bullish on July 12, 2021, and the stock is technically in a Bullish range now. Multiple factors for the stock are bullish like MACD, Bollinger Band, KST, OBV and DOW.
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The stock is trading at a fair value compared to its average historical valuations and with ROCE of 18.9, it has a Fair valuation with a 2.3 Enterprise value to Capital Employed. Along with generating 212% return in the last 1 year, the stock has outperformed BSE 500 in the last 3 years, 1 year and 3 months.
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тАЬGiven the strong demand outlook, we expect the companyтАЩs growth trajectory to accelerate further with timely commissioning of new 2.5 MT capacity from September 2021 onwards,” noted ICICI Direct.
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Shares of Sagar Cements have been split on August 17, 2021 (ex-date) pursuant to the board and shareholder approval granted for sub-division of shares in its meetings on July 1, 2021 and July 28, 2021, respectively.
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Subsequently, the shares of the company have been split in the 1:5 ratio тАФ an equity share with existing face value of Rs 10 has been subdivided into five equity shares of Rs 2 face value each.
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“At the current market price of Rs 311 per share, the stock is still trading at attractive valuations of 6.4x FY23E EV/EBITDA leaving decent scope for further upside. Hence, our target price has also been revised upwards to Rs 390 per share (i.e. by raising multiple to 8.0x FY23E EV/EBITDA) vs. earlier target price of Rs 340 per share,” the research firm said.
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