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Hold Ramco Cements; target of Rs 735: ICICI Direct

ICICI Direct recommended hold rating on Ramco Cements with a target price of Rs 735 in its research report dated May 25, 2022.

May 30, 2022 / 04:52 PM IST
 
 
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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.



Outlook


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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first published: May 30, 2022 04:52 pm
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