Ramco Cements Q1 Results Review - Below Estimates; Debt, Interest Expense Rise QoQ: Motilal Oswal

Capacity utilisation at 79% in Q1 FY24 versus 68% in Q1 FY23.

A mason levelling cement. (Source: freepik)

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Motilal Oswal Report

The Ramco Cements Ltd.’s Q1 FY24 performance was below our estimates due to lower-than-estimated volume and realizations. Ebitda stood at Rs 3.4 billion (versus estimate: Rs 3.8 billion), while blended Ebitda/tonne was at Rs 794 (versus estimate: Rs 861).

Ramco Cements' net profit came in at Rs 789 million (versus estimate: Rs 1.3 billion) during the quarter.

Volume was partly hit by non-availability of sand in Kerala and supply disruptions in eastern markets due to a rail accident. Power and fuel costs remained elevated as the company is carrying high-cost fuel inventory.

However, it expects this to come down in the coming quarters.

We maintain our Ebitda estimates but cut our earnings per share by 8%/12% for FY24E/ FY25E due to higher interest costs.

The stock trades at 15 times/12 times FY24E/FY25E enterprise value/Ebitda.

We maintain our 'Neutral' rating with a target price of Rs 915, based on 12.5 times FY25E EV/Ebitda.

Click on the attachment to read the full report:

Motilal Oswal Ramco Cements Q1FY24 Results Review.pdf
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Also Read: Ramco Cements Q1 Results Review - High Net Debt Remains A Concern; Maintain 'Sell': Dolat Capital

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