Share prices of most cement companies have risen by 5-30 percent over the last year. However, if there's one stock that's outperformed its peers it's Ramco Cements. The stock rose 50 percent over the last year compared to a 26 percent gain in UltraTech, 23 percent in Shree Cement and 4.17 percent in Ambuja Cement.
High pet coke inventory aided Ramco Cements' EBITDA margins in the last two quarters. For July-Sept quarter, EBITDA margin stood at 36.77 percent compared to 32.7 percent for Shree Cement, 22 percent for UltraTech Cement and 15 percent for Ambuja Cement. Pet coke prices have risen by 85 percent year-on-year, and approximately 30 percent over the last six months according to brokerage house IIFL.
Ramco's cheer may be short lived since the company may soon run out of its pet coke inventory. This, in turn, may lead to a sharp rise in operating costs in the coming quarters which will put pressure on the EBITDA margin, which in turn could hurt future performance.
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