Motilal Oswal's research report on The Ramco Cements
The Ramco Cements (TRCL)’s 3QFY23 performance was above our estimates on better realization growth. EBITDA stood at INR2.85b (v/s est. INR2.6b), while blended EBITDA/t was at INR797 (v/s est. INR735). Net profit reported was INR674m (v/s est. INR522m) in 3QFY23. Capacity utilization has improved by 9pp YoY to 70% in 3QFY23. Capacity expansion, along with increasing focus on the non-trade segment, will drive volume growth and we estimate volume CAGR of 9.5% over FY23-25E.
Outlook
The management indicated an average energy cost in 4QFY23 to remain at similar levels of 3Q, given the volatility in fuel prices. We reiterate our Neutral rating, with a TP of INR700, based on 12.5x Sep’24E EV/EBITDA.
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