Buy The Ramco Cements; target of Rs 1130: Sharekhan

Sharekhan's research report on The Ramco Cements

Average cement prices in the South rise by almost Rs. 40 per bag in October, translating to 10% higher cement prices compared to the Q2FY2024 average. International coal prices and domestic pet coke prices soften post Q2FY2024, providing operational profitability tailwinds given robust demand environment and increase in cement prices. The company would be aiming 20% y-o-y volume growth for FY2024 given strong demand environment. Its Odisha grinding unit of 0.9 mtpa is expected to be commissioned by FY2024 end.

Outlook

We retain a Buy on The Ramco Cements Limited (Ramco) with a revised PT of Rs. 1130, rolling forward our valuation multiple to September 2025 earnings and considering its strong earnings growth profile over FY2023-FY2026E.