Arihant Capital has given Hold recommendation for Ramco Cements with a target price of Rs. 1002 in its research report issued on Jan 25, 2022
Arihant Capital’s research report on Ramco Cements
Ramco Cement Limited reported weak set of numbers in Q3FY22 Revenue from Operations grew by 15.7% YoY, and 3.8% QoQ to INR 15491 mn above our estimate INR 13969 mn. Sales Volume grew by 15% YoY and 11.1% Q0Q to 3.0 MMT above our estimate of 2.6 MMT. Share of premium products stands at 22%for the current period. Demand for the quarter was weak in southern and eastern market due to delayed monsoons, festive season and covid implications. Realization/tonne remained flat YoY and declined by 6.6% QoQ to INR 5164 below our expectation of INR 5373. QoQ Sharp decline in realization was mainly due to fall in cement prices in December 21.
We value the stock at 11.5 (x) EV/EBIDTA to its FY24E EBIDTA of INR 20,991 Mn to arrive at a target price of INR 1,002 and we assign Hold rating on the stock with an upside potential of 11.7%.