Why Did Sagar Cements Shares Drop Over 4.6% Due to Weak Q2 Performance?
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Synopsis
Sagar Cements shares plummeted nearly 4% after weak quarterly results for Q2 FY26 were released, highlighting significant declines in revenue and EBITDA. Despite these challenges, the year-on-year performance showed some improvement. What does this mean for investors and the future of the company?
Key Takeaways
- Sagar Cements shares fell nearly 4% due to weak Q2 FY26 results.
- Revenue declined by 10% compared to Q1 FY26.
- EBITDA dropped by 58% sequentially.
- Employee-related costs increased due to appraisal processes.
- Year-on-year revenue showed a 27% increase.
Mumbai, Oct 24 (NationPress) Sagar Cements, a company based in Telangana, experienced a drop of nearly 4% in its shares on Friday, reaching an intra-day low of Rs 232.9 on the NSE after announcing its results for the quarter ending September 2025 (Q2 FY26).
At 12:43 p.m., the stock was valued at Rs 230.83, reflecting a decrease of Rs 11.37 or 4.69% from the previous closing price of Rs 242.2.
The company’s market capitalization is now Rs 3,084 crore, with a 52-week high of Rs 299.4 and a low of Rs 168.
Sagar Cements reported disappointing figures on a sequential quarter-on-quarter (QoQ) basis.
Revenue saw a decline of approximately 10% from Rs 670.66 crore in Q1 FY26, while operating EBITDA plummeted by 58% from Rs 121.45 crore.
The company had a profit after tax of Rs 74.9 crore in the previous quarter, contrasting with a loss of Rs 44.17 crore in the current quarter.
Such a weak performance was primarily attributed to plant shutdowns and increased employee-related expenses.
“In Q2 FY26, the kiln at the Dachepalli plant was shut down for the installation of a new preheater, while the kiln at the Mattampally plant underwent maintenance in September 2025,” the company stated.
“These shutdowns resulted in reduced clinker stocks, negatively affecting profitability for Q2 FY26,” it added.
Revenue was further impacted by a 5% drop in volumes on a sequential basis.
Moreover, the company completed its employee appraisal process for FY26 effective April 1, 2025, resulting in increased employee costs during this quarter.
However, on a year-on-year (YoY) basis, the company reported consolidated revenue of Rs 601.86 crore in Q2 FY26, which is a 27% increase from Rs 475.12 crore in the same quarter last year.
Operating earnings before interest, tax, depreciation, and amortization (EBITDA) surged by 158% to Rs 51.33 crore from Rs 19.33 crore in the previous year.
The company’s loss after tax decreased to Rs 44.17 crore compared to Rs 56.98 crore in Q2 FY25.
Point of View
I observe the recent fluctuations in Sagar Cements' stock with caution. The decline reflects operational challenges, but it's crucial to consider the year-on-year growth in revenue and EBITDA. Investors should weigh both the risks and potential opportunities as the company navigates these troubled waters.
NationPress
24/10/2025
Frequently Asked Questions
What caused the decline in Sagar Cements shares?
The decline was primarily due to weaker Q2 FY26 performance, including a significant drop in revenue and EBITDA, along with operational challenges like plant shutdowns.
How did Sagar Cements perform year-on-year?
On a year-on-year basis, Sagar Cements reported a 27% increase in revenue from operations, reflecting growth despite the recent quarterly challenges.
What are the future prospects for Sagar Cements?
While recent results are concerning, the company's historical performance and potential for recovery in operational efficiency are factors to monitor moving forward.
