Sagar Cements builds on French tie-up for new cement unit

Sagar Cements surged 3.18% to Rs 388 at 13:54 IST on BSE after the company said it has formed a joint venture with France based cement company Vicat S.A. to set up a manufacturing facility at Gulbarga in Karnataka.

The stock hit a high of Rs 389.80 and a low of Rs 375 so far during the day. The stock had a 52-week high of Rs 460 on 28 December 2007 and a 52-week low of Rs 122.60 on 25 June 2007.

The company has an equity capital of Rs 14 crore. Face value per share is Rs 10.

The current price of Rs 388 discounts its Q3 December 2007 annualised EPS of Rs 26.66, by a PE multiple of 14.55.

The joint venture company (JVC) will have a 5.5 million tonnes cement grinding unit and a four million tonnes clinkerisation facility. The company will also have a 60-megawatt (MW) gas or coal based captive power plant. The total estimated cost of the company is around Rs 2500 crore.

Vicat also proposes to acquire a 6.6% stake in Sagar Cements through issue of fresh equity of Rs 700 per share.

Vicat S.A. manufactures cement, produces ready-mixed concrete and aggregates and conducts other activities that are parallel or complementary to its core operations. The company has an annual turnover of 2136 million euros.

Sagar Cements’ net profit rose 38% to Rs 8.89 crore on 24.3% increase in net sales to Rs 74.83 crore in Q3 December 2007 over Q3 December 2006.

The company manufactures cement and provides infrastructure services. The services include construction of roads, bridges, ports, power plants and other public work. Its product includes cement and clinker.