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* Sagar Cements (SAGCEM) gained ~1% in yesterday’s weak trade on the expectation of likely traction in its operational performance.
* We expect SAGCEM to register stellar ~ 80% YoY growth in EBITDA and 260% growth in profit in 1QFY20 mainly led by robust volume growth (11% YoY) and healthy realization.
* We believe a firm pricing environment, production ramp up from new plants, commissioning of 18 MW CPP and further ramp-up in WHRS capacity and hydel power are likely to aid its performance in subsequent quarters.
* Further, geographical diversification in Central region and higher blended cement bode well for SAGCEM in the long-run.
* We maintain our fundamental BUY rating on the stock with a Target Price of Rs740.
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