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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.
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