Buy The Ramco Cements: target of Rs 850: Sharekhan

Sharekhan's research report on The Ramco Cements

The company reported marginally lower than expected revenues although operational profitability was better than expected for Q4FY2022. It witnessed decent demand growth post Q4FY2022 till date. The management expects minimum 10-15% y-o-y volume growth along with higher premium product sales contribution for FY2023. It would have to further hike prices to surpass EBITDA/tonne of Rs. 1300 at current cost of production. The capacity expansion plans largely remain on track. The company to incur a Rs. 1350 crore capex over two years.

Outlook

We maintain a Buy on The Ramco Cements Limited (Ramco) with a revised PT of Rs. 850, lowering our valuation multiple to factor in sustained volatility in energy costs.