Arihant Capital has given Hold recommendation for Ramco Cements with a target price of Rs. 704 in its research report issued on May 25, 2022

Arihant Capital’s research report on Ramco Cements

Ramco Cement Limited reported weak set of numbers in Q4FY22 Revenue from Operations grew by 4.8% YoY, and 10.3% QoQ to INR 17091 mn below our estimate INR 19971 mn. Sales Volume declined by 6% YoY and remain flat Q0Q to 3.0 MMT below our estimate of 3,9 MMT. Volumes were impacted owing to weak pricing and subdued demand Realization/tonne grew by 11.8% YoY and 10.3% QoQ to INR 5697 above our expectation of INR 5121. EBIDTA declined by 34% YoY and grew by 27% QoQ to INR 2950 mn below our estimates of INR 3272 mn. EBIDTA margin contracted by 1028 bps YoY and grew by 236 bps QoQ to 17.3%. Pressure on EBIDTA margin was mainly due to sharp increase in raw material fuel prices lower than expected volumes also put pressure on margin EBIDTA /ton declined by 30% YoY and grew by 27% QoQ to INR 983 above our expectation of INR 839. Owing to better than expected realization EBIDTA/ton came better than our estimate.


We value the stock at 9 (x) EV/EBIDTA to its FY24E EBIDTA of INR 20991 Mn to arrive at a target price of INR 704 and we maintain Hold rating on the stock.

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