KR Choksey has given Buy recommendation for The Ramco Cements with a target price of Rs. 843 in its research report issued on May 25, 2022

KR Choksey’s research report on The Ramco Cements

In Q4FY22, Ramco Cement’s revenue grew 4.9% YoY/10.4% QoQ to INR 17,134 mn. Cement sales was mostly flat at 31.92 lac tons for Q4FY22, a decline of 1% YoY from 32.13 lac tons in Q4FY21. • EBITDA has seen a decline of 34.3% YoY to INR 2,949 mn, though on QoQ basis EBITDA grew by 28.8%. EBITDA margin expanded by 247 bps QoQ to 17.2%, though on YoY basis margin suffered contraction to the tune of 1,027 bps. • PAT has seen a growth of 56.8% QoQ to INR 1,186 mn, though on YoY basis PAT suffered a decline of 45.1%. PAT margin expanded by 205 bps QoQ to 6.9%. However, on YoY basis, margin suffered a contraction of 631 bps.


At CMP of INR 659, the stock trades at 13.4x/10.6x its FY23E/FY24E EV/EBITDA. We now apply an EV/EBITDA multiple of 13x (earlier 14.5x) to FY24E EBITDA, which yields a target price of INR 843 per share (v/s previous TP of INR 1,019 per share), giving an upside of 28% over the CMP. Accordingly, we maintain our ‘BUY’ rating on the shares of Ramco Cements.

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