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The Ramco Cements shares fall 3% after missing estimates, global brokerage downgrades stock to 'underperform'

Global research firm CLSA has downgraded the stock to underperform from outperform and has cut target to Rs 1,060 from Rs 1,140 per share while Prabhudas Lilladher has maintained reduce on the stock with target of Rs 980.

July 28, 2021 / 10:26 AM IST
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The Ramco Cements share price was down over 3 percent in the morning session on July 28, a day after the company declared its June quarter results.

The cement maker on July 27 reported a 46.10 percent increase in consolidated net profit at Rs 171.67 crore for the quarter ended June, helped by growth in sales. It had posted a net profit of Rs 117.50 crore during the April-June period of the previous fiscal, it said in a regulatory filing.

Total income was up 17.33 percent to 1,239.99 crore during the quarter under review as against Rs 1,056.79 crore in the corresponding period of the previous fiscal.

Total expenses were at Rs 988.46 crore in Q1 FY 2021-22, up 9.91 percent from Rs 899.29 crore earlier.

The stock was trading at Rs 1,027.65, down Rs 32.55, or 3.07 percent at 09:54 hours. It has touched an intraday high of Rs 1,069.45 and an intraday low of Rs 1,024.20.


Global research firm CLSA has downgraded the stock to underperform from outperform and has cut the target to Rs 1,060 from Rs 1,140 per share. It is of the view that Q1 EBITDA was largely in-line while volumes fell 33 percent QoQ.

EBITDA was also in-line with lower volumes offset by higher realisations adding that weak volume attributed to state-specific lockdowns, according to a CNBC-TV18 report.

"We expect FY22 volume growth of 12% YoY and EBITDA per tonne of Rs 1,470. We await a pick-up in volume growth before turning constructive with volume growth remaining elusive," it said.

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According to domestic research firm Prabhudas Lilladher, The Ramco Cements reported Q1FY22 EBITDA below its/consensus estimate. The miss came on all counts except in line realisations.

"We remain negative on Southern region due to overcapacity and volatile demand pattern. As demand outlook improves for the region in H2, volume growth would come at the cost of weaker margins due to rise in competition for market share and low capacity utilisation," it said.

"Due to expensive valuations and weak outlook on southern region, we maintain reduce on the stock with a target of Rs 980 (earlier Rs 950), EV/EBITDA of 14x FY23E," it added.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Jul 28, 2021 10:26 am

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