Sagar Cements will be commissioning the clinker line of Andhra Cements Ltd (ACL), which it acquired last year, in the middle of the current quarter, according to its Joint Managing Director Sreekanth Reddy. 

It operationalised the grinding side of Andhra Cements and Mills last month. “We are expecting an incremental 1 million from Andhra Cement for FY24,’‘ Reddy said. 

FY23 has been an eventful year for the company, a year wherein the Hyderabad-based company achieved its stated objective of attaining 10 million capacity well before 2025, following the acquisition of Andhra Cements.

Sagar reported ₹622 crore revenue for the fourth quarter as against ₹502 crores during Q4 FY22, marking a 24 per cent growth largely driven by volume following the commission of new capacities and infrastructure activities, among others.

Also read: Cement industry: Will cooling input prices help the manufacturers?

EBITDA for the quarter stood at ₹39 crores as against ₹61 crores generated during Q4 FY22. The margin for the current period stood at 6 per cent as against 12 per cent reported during the corresponding period last year.

“We believe that Andhra Cements is a good addition to our portfolio as it not only helps solidify our presence in our core markets, but also helps in better serving our customers in a timely and cost-effective manner,’’ Reddy said. 

It is proposed to invest ₹468 crore in Andhra Cements to upgrade its capacities. The upgradation of clinker capacity from 1.65 MTPA to 2.3 MTPA and cement capacity from 1.8 MTPA to 3 MTPA is on the cards and the upgradation is expected to be completed by H2 FY25. 

On the industry scenario, Reddy said that overall there has been a good pick up in the volumes for the sector in general, aided in part by steady demand from infrastructure projects and IHB segment.

“Prices, though, have remained steady, and we are hopeful that the same would improve with time. On the whole, we remain optimistic about the sector’s prospects,” Reddy said.

The company expects an improvement in demand and pricing on the back of the government’s infrastructure push coupled with the demand for urban housing, going forward.

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