Neutral The Ramco Cements; target of Rs 1030: Motilal Oswal

Motilal Oswal's research report on The Ramco Cements

TRCL’s 4QFY25 EBITDA was below estimates due to volume miss and higherthan-estimated opex/t. EBITDA declined ~23% YoY to INR3.2b (~31% miss) and EBITDA/t declined ~20% YoY to INR607 (est. INR782). PAT (adj. for profit on sale of non-core assets) declined ~77% YoY to INR282m (est. 1.3b) The company’s net debt declined by INR1.4b QoQ to INR44.8b as of Mar’25, aided by proceeds from the disposal of non-core assets (monetized INR4.6b in FY25 vs. its target of INR10.0b). The remaining balance is expected to be monetized by Jul’25, in line with the earlier commitment. It is expanding its clinker/grinding capacity by 3.2mtpa/1.5mtpa at Kolimigundla, AP (line II). The company has further plans of debottlenecking/adding GUs at existing facilities with minimal capex to reach its capacity target of 30mtpa by Mar’26 vs. 24mtpa currently.

Outlook

We maintained our earnings estimates for FY26/FY27. The stock is currently trading at 15x/13x FY26E/FY27E EV/EBITDA. We value the stock at 13x FY27E EV/EBITDA to arrive at our TP of INR1,030. Reiterate Neutral.

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