The Ramco Cements Ltd. share price target

The Ramco Cements (TRCL)'s 4Q result highlights the adverse impact of higher sales in the East India market, resulting in QoQ decline in EBITDA/t to INR1,399 weighed by both lower realization and higher cost. Our FY22E/FY23E estimates are broadly unchanged. We retain our Neutral rating as we believe the valuation at 13.1x FY23E EV/EBITDA prices in the...

Incremental volumes from new units (2 MT already commissioned and 1 MT Odisha GU commissioned in September 2020) would help it to grow ahead of industry in FY22E. The company is also commissioning the clinkering unit of 1.5 MT along with 9 MW WHRS in Jayanthipuram, 2.25 MT clinker unit in Kurnool by Q1FY22E, Q2FY22E, respectively, against earlier target of March 2021. Factoring this, we model 11.6% revenue CAGR in FY20-23E. While newly commissioned units would lead to a reduction in transit distance for the target markets in East India, the commissioning of total 39 MW WHRS...

Strong realisation aided growth despite volume decline 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...

Incremental volumes from new units (2 MT already commissioned and 1 MT Odisha GU commissioned in September 2020 and 1 MT GU Kurnool in FY22E) would help to grow ahead of industry in FY22E. The company is also commissioning the clinkering unit of 1.5 MT along with 9 MW WHRS in Jayanthipuram and 2.25 MT clinker unit in Kurnool by March 2021. Factoring this, we model 11.6% revenue CAGR in FY20-23E. While newly commissioned units would lead to a reduction in transit distance for target markets in East India, the commissioning of total 39 MW WHRS (cost savings...

The Ramco Cements (TRCL) reported EBITDA below our and consensus FY20, FY13-FY15 and FY09-FY11. Secondly, TRCL's earnings profile would deteriorate with increasing exposure to low margin and volatile markets of AP/Telangana and East regions. Due to expensive valuations and presence in over supplied regions like South and East, we have negative outlook on the...

Ramco Cement reported a remarkable performance at operating level in Q2FY21 with EBIDTA growing by 49.7% YoY & 70% QoQ, to Rs 4420 mn due to all-round decline in most expenses (except for employee costs). Sharp control in overheads and low-cost inventory of petcoke aided the decline in operating costs. EBITDA margin expansion of 1274 bps YoY & 1021 bps to 35.2% was mainly led by18.2% YoY rise in realisations. Hence, net revenue de-growth was contained at 4.5% YoY but rose by 20.2% QoQ to Rs 12,570 mn, despite sales volume de-growth of 18.8% YoY to 2.21 MT due to Covid...

New capacities to bring efficiency, spur growth in FY22E Incremental volumes coming up from additional capacities (2 MT already commissioned and 1 MT Odisha GU commissioned in September 2020, 1 MT GU Kurnool in FY22E) would help to grow ahead of industry growth in FY22E. Ramco is also commissioning the clinkering unit of 1.5 MT along with 9 MW WHRS in Jayanthipuram and 2.25MT clinkering unit in Kurnool before March 2021. Factoring this new capacity, we model 12.1% revenue CAGR in FY20-23E. While newly commissioned grinding units in Vizag, West Bengal,...

We expect 9.3%/ 16.2%/ 15.8% revenue/ EBITDA/ PAT CAGR over FY20-23E led by -8.8%/ 17.0%/ 10.0% volume growth and 11.2%/ 0.0%/ 0.5% realization growth in FY21E/ FY22E/ FY23E. We introduce FY23E. We increase our revenue estimates by 5.5%/ 5.2% and EBITDA estimates by 37.2%/ 26.3% for FY21E/ FY22E factoring H1FY21 results. Accordingly, we increase our PAT estimates by 64.9%/ 42.3% for FY21E/ FY22E. We like TRCL for its strong distribution (supports its industry leading volume growth) and healthy profitability metrics...

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 17.8MT (South-15.54MT & East-2.25MT). TRCL has captive Thermal power...