Sharekhan's research report on The Ramco Cements
Strong earnings beat for Q4FY2023 was led by robust volume growth of 46% y-o-y and higher-than-expected operational profitability at Rs. 851/tonne. The company expects to achieve a 20% y-o-y volume growth for FY2024 on the back of resilient demand from infra and housing. Operational profitability to get fillip from lower fuel costs from Q2FY2024. Front loading of capital expenditure for future expansions would entail lower costs for incremental organic expansions along with reviving return ratios.
Outlook
We retain a Buy on The Ramco Cements Limited (Ramco) with a revised PT of Rs. 1010, raising our valuation multiple considering strong earnings growth profile over FY2023-FY2025E.
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