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Hold Ramco Cements; target of Rs 845: ICICI Direct

ICICI Direct recommended hold rating on Ramco Cements with a target price of Rs 845 in its research report dated August 02, 2022.

August 04, 2022 / 05:15 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 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 a cost efficient player in South India.


Outlook


Post completion of capex, debt levels would peak-out. However, on nearterm cost challenges, rich valuations (at $136 EV/tonne), we maintain HOLD. We value Ramco at Rs 845 i.e.13.5x FY24E EV/EBITDA.


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Ramco Cements - 020822 - ic

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first published: Aug 4, 2022 05:15 pm
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