Analysts Are Updating Their Sagar Cements Limited (NSE:SAGCEM) Estimates After Its Second-Quarter Results

Last week, you might have seen that Sagar Cements Limited (NSE:SAGCEM) released its quarterly result to the market. The early response was not positive, with shares down 4.6% to ₹229 in the past week. The results were positive, with revenue coming in at ₹6.0b, beating analyst expectations by 5.0%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the consensus forecast from Sagar Cements' six analysts is for revenues of ₹27.0b in 2026. This reflects a solid 8.3% improvement in revenue compared to the last 12 months. Sagar Cements is also expected to turn profitable, with statutory earnings of ₹0.85 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of ₹26.8b and losses of ₹0.90 per share in 2026. Although we saw no serious change to the revenue outlook, the analysts have definitely increased their earnings estimates, estimating a profit next year, compared to previous forecasts of a loss. So it seems like the consensus has become substantially more bullish on Sagar Cements.

View our latest analysis for Sagar Cements

The consensus price target was unchanged at ₹270, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Sagar Cements at ₹327 per share, while the most bearish prices it at ₹199. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Sagar Cements' growth to accelerate, with the forecast 17% annualised growth to the end of 2026 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.3% annually. So it's clear with the acceleration in growth, Sagar Cements is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Sagar Cements to become profitable next year. Fortunately, they also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Their estimates also suggest that Sagar Cements' revenue is expected to perform better than the wider industry. The consensus price target held steady at ₹270, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Sagar Cements analysts - going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Sagar Cements (at least 1 which doesn't sit too well with us) , and understanding these should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.