The Ramco Cements shares gained by a percent on October 3rd after ICICI Securities re-initiated their coverage of the stock. The domestic brokerage has given a 'buy' rating with the target price set at Rs 1,051 per share.
"Having displayed volume aggression in the past six quarters (averaging more than 30 percent YoY), we find Ramco Cements to be well placed as a major beneficiary of the improving price sentiment in south India," ICICI Securities said.
"Factoring in visibility of sustained volume growth (boosted by its recent acquisition of limestone mines in Andhra Pradesh) and improving RoE (from ~5% in FY23 to ~13% in FY26E), we value The Ramco Cements at 13x Sep’25E EV/EBITDA," the brokerage added.
The cement-maker's stock also has a ‘buy’ rating from the Geojit Financial Service with the target price set at Rs 1,034.
“The Ramco Cements' capacity expansions, coupled with the union government’s strong focus on infrastructure and housing, will aid future volumes. Now, declining input costs coupled with a shifting focus to deleveraging post FY24 will support valuation. The company has guided for strong volume growth of ~20% in FY24. We expect revenue
to grow at a 12% CAGR over FY23-25E,” the financial service firm said.
At 3 pm on the NSE, the Ramco Cements stock was quoting at Rs 919 apiece, up Rs 8.80 or 0.90 percent.
In its results for the April-June quarter, the Ramco Cements reported a 26.30 percent YoY (year-on-year) rise in revenue from operations at Rs 2,247 crore. Net profit for the quarter dropped 32.11 percent YoY to Rs 74 crore. The operating profit margins for the quarter contracted by 200 basis points on a yearly basis to 15 percent.
Ramco Cements is engaged in the business of manufacturing and selling cement and cement-related products.
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