The Ramco Cements Ltd. share price target

of non-core assets will control debt, and deleveraging from cash accrual is expected in FY27. We value TRCL at 15x FY27E EV/EBITDA (3Yr avg=~14x) to arrive at a target price of Rs. 1,268, and upgrade to Buy rating....

The company's strategic focus on monetizing non-core assets, with an estimated value of Rs, 1,000 crores, over the next year reflects its proactive approach to optimizing its asset base and strengthen- O/s Shares (Mn) ing its balance sheet. As part of the monetization plan, the company has already realized Rs. 460 Market Cap (INR bn) crores from these assets, with the remaining expected by July 2025. The company's decision should help reduce its debt and provide capital expenditure for the next set of expansions. We believe the Face Value (INR) allocation of these cash proceeds would be a key monitorable in the future. Ramco Cements has...

TRCL’s 4QFY25 EBITDA was below estimates due to volume miss and higherthan-estimated opex/t. EBITDA declined ~23% YoY to INR3.2b (~31% miss) and EBITDA/t declined ~20% YoY to INR607 (est. INR782).

Q4 revenue declined ~11%/21% YoY/QoQ, as price pressure impacted realisations by 4% and profitability severely (down by 83% YoY)

The Ramco Cements (TRCL) is expected to benefit from the sharp price hikes in the southern region along with a higher pace of consolidation in the region. The average cement price in the South has increased MoM by INR33/bag (~10%) in Apr’25.

Q3 revenue declined ~6%/3% YoY/QoQ as pricing pressures impacted realisations and profitability severely (down by 10%/5% YoY/QoQ)

Q2 revenue declined ~13% due to tepid volume growth and pricing pressures affecting realisations (down by 10%/5% YoY/QoQ)

We retain a BUY on Ramco with a revised PT of Rs. 1,060, marginally increasing our valuation multiple considering its strong cost competitiveness and future capacity additions at minimal capex requirements.

Ramco reported marginally lower than estimated standalone revenues at Rs. 2088.4 crore (down
6.8% y-o-y) for Q1FY2025 led by lower-than-expected volumes.

The Ramco Cements’ (TRCL) cost performance in Q1FY25 was impressive with variable cost/t plunging >4% QoQ and total cost/t being 2% below our expectation.

TRCL’s 1QFY25 EBITDA was in line with our estimate as lower-than estimated opex/t offset lower-than-estimated volume. EBITDA came in at INR3.2b (est. INR3.1b).

Q4 revenue growth muted at 4% YoY as weak demand in key operating regions continues; pricing pressure dampens realisations

Q3 revenue growth muted at 6% YoY due to poor demand; pricing pressure dampens realisations