Capacity Expansion To Boost Its Presence In Andhra & Telangana BUY The Ramco Cements (TRCL) has announced 3.15mt cement capacity greenfield expansion in Kurnool district of Andhra Pradesh (AP) in South India. This is in addition to the satellite grinding units that will be commissioned in FY20 (see details below). The integrated unit in Kurnool will have a clinker capacity of 1.8mt. This will help TRCL in addressing the clinkerconversion mismatch and also boost its presence in the strong markets of AP and Telangana. TRCL is addressing its key power requirement for the new capacity by adding 18MW captive power unit and ~20MW of waste heat recovery system. Further, the unit is backed by a railway siding that will help control logistics cost. TRCL is progressing smoothly in commissioning its...

Ramco reported a good set of Q2FY19 numbers. Revenues increased 11% YoY to | 1,183.5 crore (above I-direct estimate of | 1,122.9 crore) mainly driven by double digit volume growth of 14.7% YoY to 2.47 MT (slightly above I-direct estimate of 2.4 MT) due to higher sales in the eastern region while realisations stayed weak (down 3.3% YoY to | 4794/t) due to monsoon but were better than our estimates of | 4,684/t) With better-than-expected realisations, the company managed to clock...

regions. However, weakness in realisations continues due to demand from low margin non-trade segment and intense rivalry. Series of capacity addition in the region and high aspiration of players to increase market share in rising demand environment would continue to keep prices under pressure for prolonged period. Led by highly efficient operations, TRCL remains the best play in Southern region. However, the weaker prices and higher costs would continue to keep earnings under...

The Ramco Cements (TRCL) reported a stable operating performance driven by steady realisation (marginal decline), despite strong volume growth. Revenues grew ~19% YoY to 2.61mnmt (above our estimate of 2.47mnmt) driven by healthy demand from the eastern region and recovery in TRCL's key markets like Tamil Nadu (TN). Realisation marginally declined by ~1.5% YoY to Rs4,537/tn, despite strong volume growth because of the judicious sales mix in core markets and new regions. Cost escalation because of higher energy and logistics costs contributed to operating cost inflation of ~10% YoY at Rs3,709/tn. Limited pass- through led to EBITDA margin compression of 771bps YoY (partially because of a higher base) to 20.5% YoY....

Revenue fell by 5.18% to Rs. 1185.97 Cr in Q1FY19 when compared to the previous quarter. The Ramco Cements Ltd Q1FY19 results Comment

Ramco reported mixed Q1FY19 results. Revenues increased 18.6% YoY to | 1219.9 crore (vs. I-direct estimate: | 1178.9 crore) led by 21.4% YoY increase in volumes to 2.6 MT (vs. I-direct estimate: 2.5 MT) due to higher sales in the eastern region while realisations remained weak, down 2.3% YoY to | 4674/t (vs. I-direct estimate: of | 4,667) EBITDA/t declined 29% YoY to | 959/t (vs. I-direct estimate: | 1,033/t)...

RCL's revenue grew by a healthy 20% YoY (-5% QoQ) to Rs11.9bn led by 22% YoY growth in sales volume to 2.61mnT (including exports of 0.04mnT) owing to higher contribution from the Eastern markets and gradual traction in TN markets since last couple of months. Looking ahead, we...

Weakness in realisations further aggravated the slide in margins. Price hike undertaken in last couple of months would help TRCL to expand the margins from Q1 levels. However, given the high price levels in Tamil Nadu and Kerala and high competitive intensity in AP and Telangana, price hikes would fail to outpace the increase in costs. In this backdrop, we cut our earnings estimates for FY19e/FY20e estimate by 23%/15%. Led by highly efficient operations and strong B/S, TRCL remains the best play...

Cost Control Prevents Sharp Operating Performance Decline The Ramco Cements (TRCL) reported a healthy operating performance for 4QFY18 driven by strong cost control. Revenues grew on account of volume pick-up of ~20% YoY to 2.74mnmt (above our estimate of 2.62mnmt) backed by strong demand from the eastern region that offset the weakness in TRCL's key markets like Tamil Nadu. Realisation improved ~3% YoY to Rs4,571/tn assisted by better pricing in TRCL's home market. Overall, revenues grew ~23% YoY to Rs12.5bn (above our estimate of Rs11.8bn). Operating costs rose ~8.5% YoY to Rs3,556/tn mainly because of energy and logistics costs. Limited pass-through because of weakness in key home markets like Tamil Nadu...

ICICI Securities Ltd | Retail Equity Research Ramco reported a mixed set of Q4FY18 numbers. Revenues increased 22.3% YoY to | 1,254.8 crore (vs. I-direct estimate of | 1,206.5 crore) led by 20.2% YoY increase in volumes to 2.7 MT (vs. I-direct estimate of 2.6 MT) due to higher sales in eastern region. Further, realisation increased 1.8% YoY to | 4,586 (vs. I-direct estimate of | 4,710) EBITDA/t declined 16.4% YoY to | 995/t (vs. I-direct estimate of...

TRCLs volumes grew 20% YoY to 2.74mt (est. of 2.6mt) in 4QFY18, driven by strong growth in the eastern market. South volumes also grew at a healthy pace. Cement realizations stood at INR4,571/ton (+2.7% YoY, -0.8% QoQ) v/s our estimate of INR4,539/ton due to weaker prices in south. Revenue grew 23% YoY to 23 May 2018 INR12.5b, better than our estimate of INR11.9b, due to the realization beat. Blended EBITDA/t fell 8% YoY (-2% QoQ) to INR985 (est. of INR1,009) due to cost push. Cost/t increased 6% YoY (-1% QoQ) to INR3,591 (est. of INR3,569) due to higher P&F; cost/t (+29% YoY, led by higher petcoke prices) and freight cost/t (+18% YoY, led by higher diesel prices).

Led by highlyefficient operations, TRCL continued to perform betterthan market despitesharpincreaseincostsandpressureonprices.Streethasapprehensionson company's ongoing capacity addition in Eastern region that it would face headwindsonmarginsduetointensecompetitionandlargecapacityadditionfrom thepeersintheregion.However,webelievethatthesecapacitieswouldgenerate strong margins at par with existing operations backed by highly competitive logisticsnetworkandblendingadvantage.TRCLremainsthebestplayonSouthern region;stretchedvaluationslimitsmaterialupsidefromcurrentlevels.Hence,we...

Ramco Cements (RCL) has delivered an improved performance in 4QFY18, with its operating profit growing by 12% YoY and 18% QoQ to Rs2.68bn (vs. our estimate of Rs2.25bn) led by higher-than-estimated sales volume. EBITDA/tonne came in at Rs980 vs. Rs1,052 and Rs996 in 4QFY17 and 3QFY18, respectively, while average realisation/tonne stood at Rs4,571 (+2.7% YoY and -0.8% QoQ). Sales volume improved substantially by 20% YoY and 21% QoQ to 2.74mnT mainly on account of higher contribution from the Eastern markets and gradual revival in Tamil Nadu. Considering visible revival in TN markets and sustained demand environment in other key markets, we believe RCL may continue to deliver higher sales in subsequent years. However,...

Weakness in cement prices in South region hurt Ramco Cements' Q3 performance. EBITDA at Rs 2.3 bn was lower than our and consensus estimate of Rs 2.6 bn. Despite low demand for cement in Tamil Nadu (its main market)

Cost escalation and soft realisation resulted in TRCL reporting operating and Net profit below estimates, despite healthy volume growth of 14.4% YoY & 5.7% QoQ. A recent interaction with dealers and south India based companies suggest enhancement of cement realisation from the exit rate of Q3FY18. Supreme court stay on Madras high court ban on the sand mining will aid improve cement offtake in the key market of Tamil Nadu and lead to pricing environment...

The Ramco Cements Ltd Q3FY18 results comment Revenue rose by 1.77% to Rs. 1047.51 Cr in Q3FY18 when compared to the previous quarter. Also, it increased by 12.54% when compared with Q3FY17.

Maintain NEUTRAL with a TP of Rs 690 (12x Dec-19 EV/EBITDA). Ramco Cements' numbers missed estimates (EBITDA/t: Rs 1,016/t, -23.2/-19.6% YoY/QoQ, Est 1,274). While volumes (2.27 mT, 14.7% YoY, Est 2.21mT) were in-line, realisations (Rs 4,606/t, -1.9/-3.7% YoY/QoQ, Est 4,879) led to the miss. Freight costs increased in the quarter (14.1/4.8% YoY/QoQ) owing to increased diesel prices.

During Q3FY18, the company posted revenues of INR 10564 mn which grew by 12% y-o-y and was flattish on q-o-q basis. Growth was primarily led by higher volumes which stood at 2.27 MT (+14.5% y-o-y and +5.6% q-o-q) as against our estimates of 2.25 MT. EBITDA witnessed a sharp decline of 14.4% y-o-y and 22% q-o-q and stood at INR 2353 mn. EBITDA margins took a hit of 686 bps y-o-y and 600 bps q-o-q owing to softer realizations and significant surge in freight costs....

ICICI Securities Ltd | Retail Equity Research Ramco reported mixed set of Q3FY18 result. Revenues increased 12.0% YoY to | 1,056.4 crore (vs I-direct estimate of | 1,041.0 crore) led by 14.7% YoY increase in volumes to 2.3 MT (vs I-direct estimate of 2.2 MT) due to higher sales in eastern region. However, realisation declined 2.4% YoY (down 6.3% QoQ) to | 4,645 (vs I-direct estimate of | 4,849). EBITDA margin decreased 688 bps YoY to 22.3% (below I-direct estimate of 25.1%) due to 33.1% YoY increase in power & fuel cost...