Feb 15, 2017 01:30 PM IST | Source: Moneycontrol.com
Buy Ramco Cements; target of Rs 770: Centrum
Centrum is bullish on Ramco Cements has recommended buy rating on the stock with a target price of Rs 770 in its research report dated February 07, 2017.
Centrum's research report on Ramco Cements
TRCL has been capitalising its balance sheet strength to build fuel inventory, thus moderating impact of rising energy costs. Thus, we expect TRCL to continue to deliver 17% EBITDA CAGR over FY16-19E and sustain industry leading operating performance/ return ratios. Amid low capex outlook for the next two to three years, we estimate TRCL to become a zero net debt company in FY118/19E.
We maintain our Buy rating on Ramco Cements (TRCL) and revise our TP to Rs 770 (earlier TP Rs 700). TRCL delivered strong 22% YoY volume growth in Q3FY17 (+11% YoY growth in south, +68% YoY in east) which offset weak pricing YoY and led to 8% YoY EBITDA growth. Lower interest cost and higher other income further boosted adj PAT growth by 43% YoY. Strong volume growth should continue to deliver operating leverage gains.
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