HDFC Securities flags Sagar Cements capacity rise to 12mn MT after Andhra Cements brownfield commissioning

No exchange filings came through Orivam's own analysis pipeline today, so the day's reading material was broker research, and it was dominated by a single house: HDFC Securities, with notes on cement, footwear retail and personal care.

The most detailed work was on Sagar Cements and its subsidiary Andhra Cements. HDFC Securities says the 0.7mn MT brownfield expansion at Andhra Cements was completed at the end of September 2026, taking consolidated clinker and cement capacity to 7mn MT and 12mn MT respectively. On the announced merger, the note says the 29-for-98 share swap would issue 6.8mn new Sagar Cements shares, roughly 5% dilution, with completion expected by early FY28 and promoter holding moving to 46% from 48%. The brokerage maintains ADD on Sagar Cements with an unchanged target of INR 190, built on 70% weight to 6.5x Sep'28E EBITDA and 30% to replacement value at USD 65 per tonne. It trimmed FY27 and FY28 EBITDA estimates by 7% and 4.4%, sees margins compressing to about INR 430 per tonne in FY27 before recovering to INR 552 by FY29, and expects net debt to EBITDA to fall below 3x by FY29 from 5.5x in FY26, with FY26-29 volume and EBITDA CAGR of 10% and 16%.

On Metro Brands, HDFC Securities maintains ADD with a DCF-based target of INR 1,030, noting the stock has corrected about 34% over a year and now trades near 35x Sep-28 earnings, with the target implying about 43x. The brokerage cut FY27 and FY28 EPS estimates by 5-7% while pencilling in about 13% year-on-year revenue growth in Q2FY27 alongside a 40 basis point margin hit from minimum wage increases. It models about 18% revenue CAGR over FY27-29, 35-40 Walkway store additions in that period, and contributions from Clarks and Footlocker from FY28 and Fila from FY29.

On Honasa Consumer, the brokerage reiterates BUY with a Sep-27 target of INR 550, lowering its multiple to 5x EV/sales from 5.25x on what it calls a sector de-rating. The note frames offline execution as central to the next growth phase: the channel is about 35% of the business and over 50% for Mamaearth, and management is targeting a threefold expansion in direct reach to 300,000 outlets over three years, with value-weighted distribution rising from 40-45% to 80-85%. HDFC Securities expects about 25% revenue growth in Q2FY27 at roughly 12% operating profit margin.