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Hold Ramco Cements; target of Rs 704: Arihant Capital

Arihant Capital recommended hold rating on Ramco Cements with a target price of Rs 704 in its research report dated May 25, 2022.

May 30, 2022 / 08:44 PM IST
 
 
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Arihant Capital's research report on Ramco Cements


Ramco Cement Limited reported weak set of numbers in Q4FY22 Revenue from Operations grew by 4.8% YoY, and 10.3% QoQ to INR 17091 mn below our estimate INR 19971 mn. Sales Volume declined by 6% YoY and remain flat Q0Q to 3.0 MMT below our estimate of 3,9 MMT. Volumes were impacted owing to weak pricing and subdued demand Realization/tonne grew by 11.8% YoY and 10.3% QoQ to INR 5697 above our expectation of INR 5121. EBIDTA declined by 34% YoY and grew by 27% QoQ to INR 2950 mn below our estimates of INR 3272 mn. EBIDTA margin contracted by 1028 bps YoY and grew by 236 bps QoQ to 17.3%. Pressure on EBIDTA margin was mainly due to sharp increase in raw material fuel prices lower than expected volumes also put pressure on margin EBIDTA /ton declined by 30% YoY and grew by 27% QoQ to INR 983 above our expectation of INR 839. Owing to better than expected realization EBIDTA/ton came better than our estimate.



Outlook


We value the stock at 9 (x) EV/EBIDTA to its FY24E EBIDTA of INR 20991 Mn to arrive at a target price of INR 704 and we maintain Hold rating on the stock.

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first published: May 30, 2022 08:44 pm
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