Motilal Oswal's research report on The Ramco Cements
The Ramco Cements (TRCL)’s 1QFY24 performance was below our estimates due to lower-than-estimated volume and realizations. EBITDA stood at INR3.4b (vs. est. INR3.8b), while blended EBITDA/t was at INR794 (vs. est. INR861). Net profit came in at INR789m (vs. est. INR1.3b) during the quarter. Volume was partly hit by non-availability of sand in Kerala and supply disruptions in eastern markets due to a rail accident. Power and fuel costs remained elevated as the company is carrying high-cost fuel inventory. However, it expects this to come down in the coming quarters.
Outlook
We maintain our EBITDA estimates but cut our EPS by 8%/12% for FY24E/ FY25E due to higher interest costs. The stock trades at 15x/12x FY24E/FY25E EV/EBITDA. We maintain our Neutral rating with a TP of INR915, based on 12.5x FY25E EV/EBITDA.
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