Buy The Ramco Cements; target of Rs 805: KRChoksey

KRChoksey's research report on The Ramco Cements

Total Sales stood at INR 11888 mn which was up by 6.7% Y-O-Y and flattish Q-O-Q. Top-line stood marginally below our expectations of INR 12220 mn on account of lower than anticipated realization growth on Y-O-Y basis. EBIDTA stood at INR 2904 mn which was down by 2% Y-O-Y and up 15% Q-O-Q and EBIDTA margin stood at 28.2% as against 30.7% in Q1FY17 and 24.6% in Q4FY17. EBITDA was marginally above our estimates of INR 2800 mn while EBITDA/ton during the quarter stood
at INR 1351.

Outlook

we value The Ramco Cements Ltd at an EV/EBITDA of 13x on FY19E arriving at a target price of INR 805 translating into a potential upside of 17.3% from CMP of INR 686. Maintain BUY.