Ramco Cements delivered a headline-level beat in the fourth quarter, but strip out a one-time gain of Rs 74.2 crore and the picture is quite different, with analsts not too happy with the company losing market share for five consecutive quarters while costs have run ahead of peers. This has prompted many brokerages to cut target price on the counter.
For the March quarter, Ramco Cement's revenue rose 8.9% year-on-year to Rs 2,610 crore, Ebitda climbed 16.1% to Rs 370.6 crore and net profit jumped to Rs 151 crore from Rs 27.4 crore. On the surface, it looks like a strong quarter. However, operational woes have left brokerages bearish on the stock.
Ramco Cements Q4 FY26 (Consolidated, YoY)
- Revenue up 8.9% at Rs 2,610 crore versus Rs 2,397.3 crore
- EBITDA up 16.1% at Rs 370.6 crore versus Rs 319.2 crore
- EBITDA margin at 14.2% versus 13.3%
- Net profit at Rs 151 crore versus Rs 27.4 crore
Cement volume growth of just 4% year-on-year came in below industry growth, marking the fifth consecutive quarter of market share loss and the second consecutive fiscal year of the same.
Meanwhile, unit variable costs rose 4% on both a year-on-year and quarter-on-quarter basis, with Emkay attributing the pressure to higher usage of low-calorific coal versus pet coke and elevated lead distances.
Ebitda per tonne came in at Rs 670 against Emkay's estimate of Rs 750. This marks the the lowest profitability among peers in the 20-50 million tonne per annum capacity bracket.
Emkay downgraded the stock to Sell from Reduce, cutting its target price to Rs 725 from Rs 900, slashing FY27 and FY28 EBITDA estimates by 17% and 10% respectively, and flagging upside risk to an already elevated net debt-to-EBITDA of 2.5x that may delay planned capex.
Elara cut its target to Rs 953 from Rs 1,146, citing insufficient price hikes to cover cost increases, while JM Financial maintained Reduce with a trimmed target of Rs 940 from Rs 990, pointing to sustained pressure from petcoke, gypsum and packaging costs.
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