Neutral The Ramco Cements; target of Rs 617: Choice Equity Broking

Choice Equity Broking's report on The Ramco Cements

TRCL’s Q2FY32 standalone volumes stood at 3.31mnt (up 22% YoY, but flat QoQ) resulting in ~66% capacity utilization. Blended realization/t for Q2FY23 came in at INR 5,296(down by 1% YoY and flat QoQ), mainly due to sharp rise in Power & Fuel prices and weak cement prices. Hence, net revenue for the quarter stood at Rs. 1,784 cr (up by 20% YoY and up by 1% QoQ). Company continues its focus on premium products and hence the share of premium products increased by 4% and stood at 24% for H1FY23. The company continues its focus on its strategy of providing the “right products for right applications” and making its brands stronger.

Outlook

TRCL is available at 14.8x of our FY25E EBITDA estimates, which is at a premium of 14% from our target EV EBITDA multiple of 13x (derived assuming that ~30-40% debt will be repaid). We hence ascribe a target price of INR 617 and assign a NEUTRAL rating to the stock.