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Centrum Broking has buy call on with a target price of Rs 790. The current market price of The Ramco Cements is Rs 639.7. Time period given by analyst is one year when . price can reach defined target.

The Ramco Cements Ltd., incorporated in the year 1957, is a Large Cap company (having a market cap of Rs 15114.44 Crore) operating in Cement sector.

The Ramco Cements Ltd. key Products/Revenue Segments include Cement, Power, Dry Mortar Mix, Scrap, Ready Mix Concrete and Other Operating Revenue for the year ending 31-Mar-2021.

Financials

For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 1722.68 Crore, up 10.52 % from last quarter Total Income of Rs 1558.69 Crore and up 4.94 % from last year same quarter Total Income of Rs 1641.53 Crore. Company reported net profit after tax of Rs 123.25 Crore in latest quarter.

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Investment Rationale
With onset of monsoon and inability to raise cement prices further, margins are expected to be hit in 1HFY23 amid elevated pet coke prices. The commissioning of 1mtpa grinding unit by July 2022 will help to deliver ~14% YoY volume growth to 12.6mt in FY23 and 11% YoY growth in FY24 to 14mt. Given TRCL’s focus on capacity expansion, any major deleveraging of balance sheet is unlikely in FY23. It values TRCL at 13x FY24E EV/EBITDA and arrive at a target price of Rs790. It upgrades the stock to BUY from ADD



Promoter/FII Holdings
Promoters held 42.33 per cent stake in the company as of 31-Mar-2022, while FIIs owned 7.63 per cent, DIIs 32.63 per cent.

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