Accumulate The Ramco Cements; target of Rs 866: KR Choksey

KR Choksey's research report on The Ramco Cements

The Ramco Cements missed our estimates across the board. The Company reported revenues of INR 20,936 Mn, down 6.8% YoY (-21.8%) driven by weaker cement prices in the South. EBITDA down 6.8% YoY (-23.6% QoQ) to INR 3,202 Mn due to weaker realization; missing our estimates by 2.6% PAT missing our estimates despite declining 50.1% YoY (-71.2%) to INR 372 Mn due to weaker operational performance, higher depreciation, and interest cost. PAT missed our estimates by 1.2%.

Outlook

We increase our multiple to 13.0x FY26E EV/EBITDA (earlier: 12.0x) on the back of current expansion plan likely to be completed by FY26E. We lower our FY26E EPS to INR 25.3, down 11.5% (previously: INR 28.6), due to weaker cement prices, industry consolidation, and higher non-operating expenses. Accordingly, we increase our target price to INR 866 (previously: INR 839) and maintain our “ACCUMULATE” rating on TRCL.

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