Buy Ramco Cements; target of Rs 760: Reliance Securities

Reliance Securities' research report on Ramco Cements

Despite strong sales volume, Ramco Cements (RCL) has reported a lower-than-estimated operating performance in 4QFY17 primarily due to sharp surge in operating cost per tonne to Rs 3,398 (+8.5% YoY and +1.1% QoQ). Its EBITDA declined by 23% YoY and 9% QoQ to Rs 2.4bn vs. our estimate of Rs 2.7bn.

Outlook

Trimming down our EBITDA estimate by 12% and 8% for FY18E and FY19E, respectively to factor in subdued realizations, we continue to maintain our BUY recommendation on the stock with a revised Target Price of Rs 760.