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Research
The Ramco Cement - Result Update - ICICI Securities
Posted On : 2020-06-25 11:58:33( TIMEZONE : IST )
Ramco Cements' revenue fell 9.2% YoY to Rs. 1,394 crore (I-direct estimate: Rs. 1,422 crore). This was mainly led by 11% fall in sales volume during the quarter to 2.93 MT (I-direct estimate: 3.10 MT) as its operation was impacted from mid-March due to imposition of lockdown. Realisations improved 2% YoY to Rs. 4754/t (I-direct estimate: 4565/t).Total costs per tonne increased 3.3% YoY to Rs. 3,798/t (I-direct estimate:Rs. 3,712/t) led by higher other costs, that were up 29% YoY due to higher spend towards advertisement & sales promotion due to new launches of premium varieties of cement. All other cost heads like power, freight and raw materials were down 2.7%, 2.2% and 4.9% YoY, respectively, as commodity prices were benign. Thus, EBITDA margins fell 96 bps YoY to 20.1% (I-direct estimate: 19.1%) and EBITDA/t fell 2.6% YoY to Rs. 956/t (I-direct estimate: Rs. 876.t). Drop in volumes, profitability, dragged EBITDA down 13.3% YoY to Rs. 280.4 crore (I-direct estimate: Rs. 271 crore). In line with lower operating profit, PAT fell 10.8% YoY to Rs. 145.7 crore. Ramco ended FY20 with total debt of Rs. 3,024 crore.
Valuation & Outlook
Long history of operations, brand equity, low cost producer and a healthy B/S are key positives for the company. On account of this, the company is able to raise debt at competitive rates. We expect these factors to continue to drive robust performance in the future as well. We maintain our positive stance on the company with a BUY rating. Valuing the company at 15x FY22E EV/EBITDA we arrive at a target price of Rs. 730 (implying EV/t of $140).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_RamcoCement_Q4FY20.pdf
Shares of The Ramco Cements Limited was last trading in BSE at Rs.620.75 as compared to the previous close of Rs. 645.05. The total number of shares traded during the day was 12889 in over 1150 trades.
The stock hit an intraday high of Rs. 655.4 and intraday low of 613.75. The net turnover during the day was Rs. 8191667.
