CMP: 165

Sagar Cements Ltd. produces and distributes portland cement. The Company offers slag, super grade, and special sulphate resistance cements.

Sagar Cements is a risky bet in small cap space. Its currently trading at a P/E of less than 5. The company runs at a debt of 250 Crores putting debt to profits ratio above 5 making it risky and volatile. But there's equally good reward for investors with risk appetite with profits surging in 2012. Revenues have risen sharply from 113 Crores to 498 Crores in the last 5 years. Profits have dipped from 30 Crores to 18 Crores in the last 5 years. NPM has dipped from 25% to 4% over the last 5 years. FY 2012 has seen amazing turnaround so far with profits of almost 60 Crores in the last 4 quarters with NPM surging to double digits. Buy and hold till the profit surge is in line. Book profits when Nifty peaks in the next 24 months.