The Ramco Cements Ltd. share price target

The Ramco Cements’ (TRCL) Q4FY22 EBITDA at Rs2.95bn (down 34% YoY) was in line with consensus estimates. Cement volumes were flat YoY at 3.19mnte owing to negligible dispatches in East in Jan’22 due to weak pricing and subdued demand.

Healthy volumes, but margin pressure in the near-term The Ramco Cements Ltd (TRCL), the flagship company of Ramco group is the 5th largest cement company in India with a total production capacity of 19.8MT (South-16.6MT & East-3.2MT). TRCL has captive Thermal power...

Lower realization/higher costs led to 9%/6% drop in FY23E/FY24E EBITDA, which along with higher debt assumptions resulted in 20%/14% decline in profit estimates, respectively. Though, TRCL's near-term outlook looks challenging due to higher fuel costs (INR570/t increase in 3QFY22 variable cost v/s FY21 average), we expect the company to benefit from commissioning of new capacities. The stock trades at 15.9x/12.9x FY23E/24E EV/EBITDA and USD165/t capacity. We value it at 14.5x FY24E (v/s Dec-23 earlier) EV/EBITDA (in line...

Debt increased by ~24% YoY/8% QoQ to Rs38.4bn EBITDA declined 42% YoY to Rs2.3bn, below our/consensus estimates (CE) partially offset by better than expected volumes. We remain negative on Southern region due to overcapacity and volatile...

Self-reliance on power, split grinding units near markets and focus on green power has helped the company to remain a cost efficient player in South India Q3FY22 Results: Margins eroded sharply on cost pressure; Revenues broadly remained in line with estimates. Revenue increased 15.3% YoY to | 1,549.1 crore. Volumes were up 17.6%...

Margin under pressure; demand outlook stays firm cement capacity of 19.4 MT spread across Tamil Nadu, Andhra Pradesh, Odisha, West Bengal. In sales terms, south contributes ~71% of sales while east contributes 24%, which is served via grinding units in West Bengal (2 MT) and AP (2 MT). Q2FY22 Results: Operational performance remained marginally better than our estimates; tax adjustments inflated profitability during Q2FY22. Revenue increased 18% YoY to | 1493 crore. Volumes were up 22.5% YoY...

TRCL's 2QFY22 result reflects volume recovery in South India, post the slowdown seen during COVID-19 lockdowns. Volume improved by 27% QoQ and 23% YoY, which helped it to operate its clinker plants at 74% capacity. The company remains a play on the volume recovery theme and one of the better picks in the Cement space, led by its capacity expansion plans (clinker capacity increase of 38%) and Balance Sheet deleveraging (net debt/EBITDA expected to peak out at 2.1x in FY22E and should improve to 1x in FY24E). Recent price increase in its key markets should help to mitigate fuel cost...

Strong realisation aided growth despite volume stress The Ramco Cements Ltd (TRCL), the flagship company of Ramco group is the 5th largest cement company in India with a total production capacity of 19.8MT (South-16.6MT & East-3.2MT). TRCL has captive Thermal power...