Arihant Capital recommended hold rating on The Ramco Cements with a target price of Rs 853 in its research report dated May 22, 2019.
Arihant Capital 's research report on The Ramco Cements
Ramco Cement came out with stable set of results in Q4FY19, ahead of our estimates. Revenue for the quarter grew 22.1% YoY and 26.6% QoQ to Rs 15324 mn against our estimate of Rs 13370 mn. EBITDA for Q4FY19 came at Rs 3251 mn (estimate Rs 2540 mn) a growth of 19.5% YoY and 51.9% QoQ. EBITDA margin expanded 354bps QoQ (-48bps YoY) to 21.2% for the quarter against 21.7% in corresponding quarter last year. EBITDA margin was stable YoY (slight fall of 48bps) despite higher raw material (+24.3% YoY) costs, due to efficiency at the company level. PAT for the quarter stood at Rs 1654 mn which was ahead of our estimate of Rs 1520 mn, a growth of 52.3% YoY and 63.6% QoQ. The robust growth of PAT on YoY basis (+52.3% YoY) was partially due to lower effective tax rate for the quarter (33% in Q4FY19 v/s 47.1% in Q4FY18).
We remain positive on Ramco Cements from longer term perspective, and have a Hold rating with a revised target price of Rs 853.
For all recommendations report, click here
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