The Ramco Cements Ltd. share price target

We remain cautious on Ramco Cements due to mounting cost pressures and a challenging operating environment that could weigh on profitability over the near term. Management has guided for cement demand growth of 6–7% in FY27; however, demand in Q1FY27 remained muted due to state elections across Tamil Nadu, Kerala, and West Bengal.

Volume growth in lower single digits at ~4% YoY. Eastern exposure helps pricing recovery ~5% YoY (2% QoQ), supports revenue growth

Revenue grew 6% YoY, and sales volumes increased by 4% YoY in Q3FY26, EBITDA remained flat on a YoY basis, while EBITDA per ton declined ~2.9%, largely due to a 4% increase in raw material costs, including the impact of higher...

Overall volumes grew 5% YoY. Subdued realisations (+1% YoY) on weak East pricing, kept revenue growth modest at 6% YoY

The near-term outlook remains steady but moderated, with earnings likely to be range-bound as benefits from improved pricing and higher green-energy usage are partly offset by raw material cost pressures arising from the MBT levy.

The Ramco Cements’ (TRCL) Q2FY26 EBITDA at INR 3.9bn (up 24% YoY/down 3% QoQ) stood just 4% ahead of our estimates despite a massive volume beat (being 13% ahead of forecast; up 10% QoQ though flattish YoY).

Q2 revenue grew by ~10%/8% YoY/QoQ to ~Rs 22.3bn, helped by healthy pricing gains of 12% YoY. Volume slips by 2%

The Ramco Cements’ (TRCL) 2QFY26 EBITDA grew 24% YoY to INR3.9b (12% beat), led by higher-than-estimated volume (5% beat) and lower-thanestimated opex/t. EBITDA/t rose 22% YoY (down 12% QoQ) to INR851 (6% beat).

Kolimigundla, debottlenecking of existing plants, and additional grinding capacities. We value TRCL at 15x FY27E EV/EBITDA (vs. 3-year average of ~14x), arriving at a target price of 1,270, and downgrade the rating to Accumulate....

Strong focus on scaling up construction chemical business: Company targets to scale this construction chemicals business revenue to Rs 2000 crore in the next 4-5 years (from Rs 210 crore revenue in FY25), with revenue share increasing to 12.5% by FY30E (from 2.5% in FY25), led by healthy demand in...

Q1 revenue declined ~1%/14% YoY/QoQ, as TRCL chased realisations that gained by 8%/12% while volume was down 7%/23%

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...

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

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).

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)