Ramco Cement shares were trading lower on February 7 following muted industry demand and weak Q3FY25 earnings performance. Ramco Cement shares are trading at Rs 885.00 as of 10:10 am on February 7, a decline of 0.59 percent.
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In its Q3FY25 earnings, Ramco Cements recorded revenue of Rs 1,976.6 crore, marking a 6.1 percent year-on-year (YoY) decline. The drop in revenue largely was led by muted demand and pricing pressures in the cement sector.
Even on the operational front, the figures were weak with EBITDA declining by 29.3 percent YoY. It stood at Rs 279.4 crore for the quarter ended December of FY2025, as against Rs 395.5 crore in Q3FY24. EBITDA margin contracted sharply to 14.4 percent, from 19 percent on YoY basis.
Brokerages earlier revealed their projection of the company's growth ahead, with Nomura setting a 'Buy' at a target price of Rs 1,000/sh. Further, the company missed the brokerages' EBITDA target estimates by 20 percent. Nomura continues to maintain its FY26 Capex guidance at Rs 1,200 crore.
Jefferies iterated a 'Hold' call on the shares, with a target price of Rs 845/sh. It believes region price estimates to continue to be impacted as acquired capacities ramp. It has also weighed on the company's profitability trim of Fy25 Ebitda estimates by 4 percent. On the other hand, CLSA's underperformed call on Ramco Cement is at a target cut to Rs 795 from Rs 855/sh.
Motilal Oswal expects Ramco Cement’s volume growth to slow to around 7% compound annual growth rate (CAGR) over FY25-27, compared to 18% over FY21-25. The company faces increased competition, pricing pressures in key markets, leveraged balance sheets, and low return ratios (Return on Equity/Return on Capital Employed in mid-single digits until FY26/FY27), which are likely to keep the stock price within a range. At the current market price, the stock trades at 14 times FY26 estimated value/earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) and 12 times FY27 EV/EBITDA. Motilal Oswal values Ramco Cement at 12 times December 2026 estimated EV/EBITDA and maintains a Neutral rating with a revised target price of INR 870 (down from INR 950).
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