Ramco Cements Q1 Results Review - High Net Debt Remains A Concern; Maintain 'Sell': Dolat Capital

Dolat Capital Report

The Ramco Cements Ltd. reported volume, revenue in line, however realization, Ebitda, Ebitda/tonne and adjusted profit after tax below estimates.

The Ramco Cements posted +26.4% YoY revenue to Rs 22.4 (-12.8% QoQ) led by volume growth of +28.7% YoY (-8.5% QoQ) to 4.3 million tonne, which was partially offset by flat realisation/ tn at -0.5%/ -4.3% YoY/ QoQ Rs 5,212.

Ebitda increased +13.6% YoY (-17.3% QoQ) to Rs 3.4 billion. However, adjusted profit after tax sharply declined by 30.6% YoY/ 48% QoQ to Rs 789 million in Q1 FY24.

We expect 10.5%/ 24.9%/ 42.6% revenue/ Ebitda/adjusted profit after tax compound annual growth rate over FY23- 25E led by 19%/ 5% volume growth and -2%/ +0.5% realisation growth in FY24E/ FY25E.

We decrease Ebitda estimates by 5% for FY24E factoring lower profitability; maintain Ebitda estimates for FY25E.

We maintain 'Sell' with revised target price of Rs 819 considering higher capex restricting sizable net debt reduction.

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