Accumulate The Ramco Cements; target of Rs 751 KRChoksey

KRChoksey recommended accumulate rating on The Ramco Cements with a target price of Rs 751 in its research report dated August 20, 2020.

Broker Research

August 21, 2020 / 14:05 IST

26 Aug, 2025 12:21

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KRChoksey's research report on The Ramco Cements

The Ramco Cements reported standalone revenue decline of 25.0% QoQ (down 24.7% YoY) to INR 1,042 Cr in Q1FY21. The company's business operations were disrupted during Apr-20 due to lockdown imposed by the Government owing to COVID-19. After relaxation of restrictions by the Government, the business operations restored gradually and is continuing with weak demand in urban/semi-urban markets. EBITDA declined by 6.9% QoQ (down 27.6% YoY) to INR 260 crores in Q1FY21. EBITDA margin contracted by 101bps YoY to 25.1% in Q1FY21 from 26.0% in corresponding quarter last year, while on QoQ basis, EBITDA margin improved significantly by 487bps. Net profit in Q1FY21 declined 42.9% YoY to INR 110 crores, while on QoQ basis net profit declined 25.0%. Net profit margin for the quarter was flat on QoQ basis but declined 335bps to 10.5%.

Outlook

We slightly raise our FY22E EV/EBITDA multiple to 13.5x (earlier 13.0x) to accommodate new capacities and expectation of better margin & and arrive at a revised Target Price of INR 751 per share; an upside potential of 7.1% over CMP. Accordingly, we reiterate an “ACCUMULATE” rating to the shares of The Ramco Cements.

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