Motilal Oswal 's research report on The Ramco Cements
The Ramco Cement’s (TRCL) 1QFY21 results highlight the company’s continued market share gains. Volumes declined only 28% YoY for TRCL (v/s 53% YoY decline for regional peer India Cements). Cement EBITDA/t also improved to INR1,283 (+34% QoQ), led by higher prices in the South. We maintain our FY21/FY22E EPS estimates and retain Neutral rating as valuation at 13.0x FY22E EV/EBITDA prices in the benefit of the expansion-led market share gains. Commissioning timelines of ongoing expansions have also been pushed ahead by 2-3 months due to COVID-19 disruption.
Outlook
The stock trades at 13.0x FY22E EV/EBITDA and USD121/t of capacity which are a significant premium to peers. We value it at 12x FY22E EV/EBITDA (in line with 10-yr average) to arrive at TP of INR620. Maintain Neutral.
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