The Ramco Cements Ltd. share price target

Ramco Cements (TRCL) reported yet another strong quarter with EBITDA/t (ex other op. income, incl windmill div) at Rs 1,509 (6.8% YoY, 13.9% QoQ). TRCL continues to register strong volume growth at 18.9% (2.03 mT) as it pushes into the East from its GUs in Vizag/Kolaghat.

Ramco Cements (RCL) has delivered a healthy performance in 2QFY17 with its operating profit growing by ~27% yoy to Rs3.07bn (vs. our estimate of Rs2.56bn) primarily due to better-than-expected sales volume, which rose 18.9% yoy to 2.03mnT. Average realizations remained firm at Rs4,769/tonne (-2% yoy & +5% qoq) aided by price recovery in AP/Telangana markets. Further, operating cost/tonne declined by ~6% yoy as power & fuel cost/tonne (-26% yoy & 5% qoq) remained under control with higher usage of petcoke and low cost inventory. Notably, cost benefits and healthy operating synergies aided RCL to report cement EBITDA/tonne at Rs1,509...

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.

Ramco reported yet another industry leading quarter with EBITDA/t (ex other op. income) at Rs 1,325 (14.2% YoY, -10.5% QoQ). Strong volume growth at 14.5% (2.08 mT, ~60% utilization on our capacity estimates) was likely driven by higher despatches in AP/East, but was coupled with a decline in realizations (Rs 4,542, -8.9% YoY). Revenues/ realisations are not comparable QoQ as 4QFY16/FY16 nos are not yet restated to comply with IndAS requirements.

Robust volume growth: TRCL's volumes grew 12% YoY to 2.08m tons in 1QFY17, driven by spurt in southern demand. Blended realization declined 3% QoQ (below expectation), as prices failed to recover in the South. Revenue grew 4% YoY to INR9.4b, a 7% miss. PAT grew 57% YoY to INR1.6b. Realization drop offset by cost moderation: Blended EBITDA/ton was INR1,325 (+14% YoY, -9% QoQ). Realization dip was partially offset by 1% QoQ (and 16% YoY) drop in unitary cost to INR3,217/ton, aided by (a) lower fuel prices (pet coke mix near ~40%; cheaper imports), and (b) positive operating...

RCL's sales volume grew ~14.5% yoy to 2.08mnT mainly supported by meaningful demand pick-up in AP/Telangana region and moderate demand pick-up in Karnataka. However, dismal realizations (-10% yoy) have impacted revenue growth. We estimate the Company's...

Strong volume show as expected; PAT beat led by lower tax: On the back of strong spurt in southern demand, TRCL's volume growth revived to positive zone after seven quarters. 4QFY16 volume was in-line at 2.09m tons (+11%...

Ramco Cements (RCL) has reported healthy set of numbers amid subdued realizations as its operating profit grew by ~30% yoy to Rs3.1bn, which is in-line with our estimate. Notably, cost benefits owing to lower fuel costs and healthy operating synergies aided RCL to report cement EBITDA/tonne at of Rs1,487 as against Rs1,276 in Q4QFY15. Demand pick-up seen in neighbouring Southern states helped RCL to witness a sales volume growth of 11% yoy to 2.08mnT (including 0.04mnT export). Notably, a healthy correction in freight cost/tonne (-16% yoy due to change in geographical mix led to low lead distance) and power & fuel cost/tonne (-29% yoy and -12% qoq owing to improved...

Ramco Cements (Ramco) reported industry leading numbers with reported EBITDA/t at Rs 1,510/t. While volumes declined ~5.4% YoY (1.63 mT, implied utilisation of ~50%), realisations continued to hold fort in the South (Rs 4,995/t, 9.3% YoY, 1.4% QoQ, 7.4% YoY). Costs declined ~Rs 140/t QoQ, but a part of it may be a one-off given other expenses came off sharply (-23% YoY, -22% QoQ).