Buy The Ramco Cements; target of Rs 843: KR Choksey

KR Choksey is bullish on The Ramco Cements has recommended buy rating on the stock with a target price of Rs 843 in its research report dated May 25, 2022.

Broker Research

May 26, 2022 / 08:15 IST

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

26 Aug, 2025 12:21

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KR Choksey's research report on The Ramco Cements

In Q4FY22, Ramco Cement’s revenue grew 4.9% YoY/10.4% QoQ to INR 17,134 mn. Cement sales was mostly flat at 31.92 lac tons for Q4FY22, a decline of 1% YoY from 32.13 lac tons in Q4FY21. • EBITDA has seen a decline of 34.3% YoY to INR 2,949 mn, though on QoQ basis EBITDA grew by 28.8%. EBITDA margin expanded by 247 bps QoQ to 17.2%, though on YoY basis margin suffered contraction to the tune of 1,027 bps. • PAT has seen a growth of 56.8% QoQ to INR 1,186 mn, though on YoY basis PAT suffered a decline of 45.1%. PAT margin expanded by 205 bps QoQ to 6.9%. However, on YoY basis, margin suffered a contraction of 631 bps.

Outlook

At CMP of INR 659, the stock trades at 13.4x/10.6x its FY23E/FY24E EV/EBITDA. We now apply an EV/EBITDA multiple of 13x (earlier 14.5x) to FY24E EBITDA, which yields a target price of INR 843 per share (v/s previous TP of INR 1,019 per share), giving an upside of 28% over the CMP. Accordingly, we maintain our ‘BUY’ rating on the shares of Ramco Cements.

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