Ramco Cements Q2FY17 operating performance was better than our estimates led by higher volumes & realisations. Revenue/EBITDA came at Rs 9.7bn/Rs 3.0bn against our estimates of Rs 8.6bn/Rs 2.30bn. Last years low base and pick-up in demand led to volume growth of 19% YoY, which offset lower realisations (-3% YoY). EBITDA/ton at Rs 1509/t improved by 6.5% YoY (on lower costs) leading to 12% YoY EBITDA growth. PAT at Rs 2.07 bn (+49% YoY) came 68% higher than estimate, led by better than expected operational performance and higher other income. Going ahead, we estimate EBITDA CAGR of 16% over FY16-18E led by 12% volume CAGR and further improvement in margins. Upgrade to Buy.