Andhra Cements slips 5%, erases losses later as Promoter begins stake sale

Sagar Cements Ltd, the promoter entity, intended to sell the equity shares via OFS route to comply with the requirements of minimum public shareholding

Shares of Andhra Cement declined 4.9 per cent to Rs 105.35 apeice on the BSE in Tuesday's intraday trade as promoter group began offloading partial stake via offer for sale. 

At 11:20 AM, shares of the cement producing company were off lows, down 1.3 per cent at Rs 109.4 per share. The stock also hit an intraday high of Rs 118 per share. By comparison, the benchmark S&P BSE Sensex was up 0.14 per cent at 72,890.79 level.

According to the company's exchange filing, Sagar Cements Ltd, the promoter entity, intended to sell the equity shares to comply with the requirements of minimum public shareholding.

 

Under the OFS, SCL would sell up to 5 per cent of the total paid up equity share capital of the company, aggregating to 4.6 million shares. The OFS would run between February 27 and 28. 

"The aggregate Promoter shareholding, as on February 26, 2024, is 95 per cent of the total paid-up equity share capital of the company. Post completion of the aforesaid sale, the aggregate Promoter shareholding in the company would be reduced to 90 per cent of the total paid-up equity share capital of the company," it said.

Shares of Sagar Cement Ltd, meanwhile, rallied 3 per cent intraday to Rs 250.8 per share.

In the December quarter, Andhra Cement posted net loss of Rs 2 lakh, down from Rs 5.74 lakh in Q3FY23. Revenue from operations came at Rs 9.79 lakh. 

Sagar Cements, on the other hand, posted net loss of Rs 10.18 crore vs Rs 23.68 crore in Q3FY23. 

The company's net consolidated total income stood at Rs 673.14 crore, clocking an increase of 14.09 per cent from Rs 590.02 crore last year. 

Analysts at Nirmal Bang Institutional Equities have maintained 'Accumulate' rating on Sagar Cements as the management has reduced its volume guidance for FY24 from 6.2 mt earlier to 5.6 mt citing the upcoming Lok Sabha elections and state elections in Andhra Pradesh.

"Ebitda guidance for FY24 has been scaled down to Rs 3,122 million. FY25 volume guidance stands at 7 mt with Andhra Cement sales pegged at 0.9-1.0 mt. We value Sagar Cements at nine times December-25E enterprise value/Ebitda with a revised target price of Rs 299," the brokerage said.