ICICI Direct's research report on Ramco Cements
Ramco Cements is the dominant player in South India with cement capacity of 19.4 MT spread across Tamil Nadu, Andhra Pradesh, Odisha, West Bengal. In sales terms, south contributes ~71% of sales while east contributes 24%, which is served via grinding units in West Bengal (2 MT) and AP (2 MT). The company also has a windmill capacity of 166 MW, captive thermal power plants of 175 MW and 18 MW of WHRS Self-reliance on power, split grinding units near markets and focus on green power has helped the company to remain a cost efficient player in South India
Post completion of major capex, debt levels would peak out while growth to accelerate with revenue CAGR of 22.6%. Hence, maintain BUY rating We value Ramco at Rs 1,200 i.e.15.5x FY23E EV/EBITDA.