Sagar Cements Group Capacity Hits 11.75 MTPA as Andhra Cements Expansion Completes

Key numbers

Group Capacity	11.75 MTPATotal manufacturing
Market Cap	₹1,967.15 CrSmall Cap
Annual Revenue	₹2,650.02 CrFY26 Consolidated
RSI (14-Day)	41.77Neutral Zone

Key highlights

• Grinding capacity at Sri Durga Cement Works scaled from 1.82 MTPA to 3.00 MTPA
• Total group cement manufacturing capacity reached a milestone of 11.75 MTPA
• Expansion follows the successful integration of Andhra Cements Limited into the group
• Modernization project included a six-stage preheater commissioned in late 2025
• Increased output supports the group's FY27 sales volume target of ~7 million MT

Production Commenced — What It Means

Sagar Cements Limited has officially commenced operations at the expanded grinding unit of its subsidiary, Andhra Cements Limited (ACL), located in the Palnadu District of Andhra Pradesh. The project adds 1.18 million tonnes per annum (MTPA) to the Sri Durga Cement Works facility, bringing its total grinding capacity to 3.00 MTPA. This strategic expansion elevates the overall group manufacturing capacity to 11.75 MTPA.

The facility is positioned as a critical hub for supplying the cement-intensive markets of Andhra Pradesh and Telangana, allowing the group to leverage increased scale to meet rising demand from government-led infrastructure and rural housing segments.

Path to This Milestone

The completion of this expansion project follows a multi-year modernization roadmap that began after Sagar Cements acquired Andhra Cements via the insolvency resolution process in 2023. Since taking control, the management has focused on upgrading the subsidiary's operational efficiency, including a prior clinker capacity enhancement to 2.30 MTPA and the installation of a new six-stage preheater in late 2025. By integrating ACL's operations and completing the final grinding mill upgrade, the group has transitioned from a restructuring phase into a high-volume execution phase, aligning with its long-term strategy to expand its footprint across South, Central, and Eastern India.

Revenue Impact

• The incremental 1.18 MTPA grinding capacity provides the necessary headroom to meet the group's FY27 volume target of 7 million tonnes
• Higher capacity utilization at the modernized Palnadu site is expected to improve the group's overall fixed-cost absorption
• Recent logistics optimization efforts at the plant site aim to reduce freight costs and improve realization per bag in core markets
• Consolidated revenue for FY26 stood at 2,650 crore, a 17 percent year-on-year increase, setting a growth baseline for the expanded capacity
• Operational efficiencies from new preheaters and grinding mills are projected to support gradual improvements in EBITDA per tonne

Sector Tailwinds

The Indian cement industry is currently benefiting from a strong focus on infrastructure-led growth, with the Union Budget 2026-27 increasing capital expenditure to 12.2 lakh crore. In South India, particularly Andhra Pradesh and Telangana, a revival in housing activity and sustained public infrastructure spending are driving demand momentum. Regional pricing power is expected to remain stable, supported by industry consolidation and steady demand-supply dynamics.

Sagar Cements is well-positioned to capitalize on these trends, using its increased 11.75 MTPA capacity to gain market share in high-growth districts while benefiting from a likely private capex recovery across construction-linked industries.

“Andhra Cements Limited (ACL) has successfully completed its expansion of cement grinding capacity from 1.82 MTPA to 3.00 MTPA at its cement manufacturing plant at Sri Durga Cement Works, Dachepalli, Palnadu District, Andhra Pradesh.”

Sagar Cements · financial snapshot

Share price	₹150.5
Market capitalisation	₹1,967.15 Cr
Revenue (annual)	₹2,650.02 Cr
Net profit (annual)	₹-11.07
P/E (TTM)	-55.57×Sector 32.99×
Promoter holding	48.33%0.00% QoQ
FII holding	1.61%Current quarter

Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.