Buy Ramco Cements; target of Rs 1051: ICICI Securities

ICICI Securities research report on Ramco Cements

Having displayed volume aggression in the past six quarters (averaging >30% YoY), we find Ramco Cements (TRCL) to be well placed as a major beneficiary of the improving price sentiment in south India. The ideal combination of net debt ‘peaking-out’ (net debt/EBITDA to improve from 3.6x in FY23 to 1.4x in FY26E) and margins ‘bottoming-out’ (from 14.6% in FY23 to ~20% in FY26E) makes TRCL a compelling investment story. Factoring in visibility of sustained volume growth (boosted by its recent acquisition of limestone mines in Andhra Pradesh) and improving RoE (from ~5% in FY23 to ~13% in FY26E), we value TRCL at 13x Sep’25E EV/EBITDA (a notch lower versus its long-term average of 14x).

Outlook

With a target price of INR 1,051/share, we re-initiate coverage on TRCL with a ‘BUY’.