Ramco Cements Q1 Results Review - Optimism Continues For H2; Maintain Buy: Systematix

While demand is expected to pick up in a meaningful way in H2, the brokerage remains watchful of the company’s volume, price performance in the face of increased competitive intensity.

Construction worker applying cement on a brick wall. (Source: Freepik)

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Systematix Research Report

Ramco Cements Ltd.’s Q1 FY25 performance was largely in line with expectations as revenue/Ebitda met estimates while profit after tax slipped due to higher interest expenses.

Revenue was down by 6.8% YoY (-21.9% QoQ) to Rs 20.9 billion versus our estimate of Rs 21.7 billion owing to flattish volumes and a sharp dip in realizations exacerbated by intense price pressures in Southern markets.

Volume was up by only 1.1% YoY (-20.6% QoQ) to 4.4 milliont onne (our estimate: 4.6 mt). Blended Realisation/tonne declined sharply by 8.1% YoY and 1.6% QoQ to Rs 4,790. Ebitda was down 6.5% YoY (-23.4% QoQ) to Rs 3.2 billion; in line with our estimate of Rs 3.3 billion. Ebitda/tonne dipped 7.7% YoY to Rs 733 despite a ~Rs 50/tonne saving in operating costs as realizations nosedived.

Cement capacity utilization for the quarter stood at 77% (versus 79% in Q1 FY24). The share of blended cement was 69% (68% last quarter) while premium products accounted for 25% of the portfolio.

We forecast a revenue/Ebitda/PAT CAGR of 9%/13%/23% over FY24-FY26E. We value Ramco Cement at 13 times FY26E EV/Ebitda arriving at a target price of Rs 950. We maintain a Buy.

Click on the attachment to read the full report:

Systematix Ramco Cement Q1 FY25 Results Review.pdf
Read Document

Also Read: Tech Mahindra Q1 Results Review - Telecom, BFSI Verticals Remain Weak: Systematix

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

lock-gif
To continue reading this story
Subscribe to unlock & enjoy your
Subscriber-Only benefits
Still Not convinced?  Know More
Watch LIVE TV, Get Stock Market Updates, Top Business, IPO and Latest News on NDTV Profit.
GET REGULAR UPDATES