ICICI Direct's research report on Ramco Cements
Ramco Cements is the dominant player in South India with cement capacity of 19.4 MT spread across Tamil Nadu, Andhra Pradesh, Odisha and West Bengal. In terms of sales, south contributes ~71% of sales while east contribute 24% which is served via grinding units in WB (2 MT) and AP (2 MT). The company also has windmill capacity of 166 MW, captive thermal power plants of 175 MW and 18 MW of WHRS • Self-reliance on power, split grinding units near markets and focus on green power has helped the company to remain cost efficient player in south India.
Post completion of capex, debt levels would peak-out. However, near-term cost challenges to keep check on margins. Hence, we downgrade our rating from BUY to HOLD. We value Ramco at Rs 735 i.e.12x FY24E EV/EBITDA.
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